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San Francisco Onion Futures Company

398 points · 179 comments · z-mach9

cwal37 · 1789793067 · focus · HN ↗
For those who don’t know:
<a href="https://en.wikipedia.org/wiki/Onion_Futures_Act" rel="nofollow">https://en.wikipedia.org/wiki/Onion_Futures_Act
(which also banned box office receipt futures)
A fun thing is to go on FRED and make a graph with prices from onions and, say, corn to see the differences in volatility.
1. chirau · 1789812062 · focus · HN ↗
  I looked up onions, lettuce and tomatoes (because burgers), and the volatility actually looks very similar. Am I missing something or looking at the wrong things?
  Tomato: <a href="https://fred.stlouisfed.org/series/WPU01130217" rel="nofollow">https://fred.stlouisfed.org/series/WPU01130217 Onion: <a href="https://fred.stlouisfed.org/series/WPU01130216" rel="nofollow">https://fred.stlouisfed.org/series/WPU01130216 Lettuce: <a href="https://fred.stlouisfed.org/series/WPU01130215" rel="nofollow">https://fred.stlouisfed.org/series/WPU01130215
  1. gradus_ad · 1789818672 · focus · HN ↗
    The weather affects all crops
    brookst · 1789824972 · focus · HN ↗
    But isn’t the point that futures trading reduces volatility from things like weather?
    brudgers · 1789833946 · focus · HN ↗
    The point is making money.
    mhh__ · 1789837261 · focus · HN ↗
    many users of derivatives willingly lose money on them because the purpose of these contracts is to transfer risk to those willing to hold it.
    brudgers · 1789837952 · focus · HN ↗
    Money is the thing at risk.
    chadgpt6 · 1789841604 · focus · HN ↗
    Is insurance risking your money?
    brookst · 1789867766 · focus · HN ↗
    Yes of course. I’ve paid for car insurance for 30+ years and have never made a single claim. So far, for me, it’s a bad risk.
    I’ll keep paying though.

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