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Discussion (51 Comments)Read Original on HackerNews
They have a website also: https://onionfutures.org
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.
https://www.npr.org/sections/money/2015/10/14/448718171/epis...
>Is this legal?
>Yes, to the best of our knowledge. 7 U.S. Code § 13-1 prohibits "contract[s] for the sale of [...] onions for future delivery [...] on or subject to the rules of any board of trade in the United States." The San Francisco Onion Futures Company is not a board of trade, defined as an "organized exchange or other trading facility". We sell contracts privately to individual buyers, and do not operate any exchange or secondary market.
Performance art against that law?
Also November onions are an absolute steal compared to the adjacent months!
I hate to argue but then what would they define this as, if not an organized exchange or other trading facility?
> [A] trading facility that— (A) permits trading— (i) by or on behalf of a person that is not an eligible contract participant; or (ii) by persons other than on a principal-to-principal basis; or (B) has adopted (directly or through another nongovernmental entity) rules that— (i) govern the conduct of participants, other than rules that govern the submission of orders or execution of transactions on the trading facility; and (ii) include disciplinary sanctions other than the exclusion of participants from trading.
And 7 USC § 1a(51)(A) defines a "trading facility" as
> [A] person or group of persons that constitutes, maintains, or provides a physical or electronic facility or system in which multiple participants have the ability to execute or trade agreements, contracts, or transactions— (i) by accepting bids or offers made by other participants that are open to multiple participants in the facility or system; or (ii) through the interaction of multiple bids or multiple offers within a system with a pre-determined non-discretionary automated trade matching and execution algorithm.
(7 USC § 1a(51)(B) then follows with some exceptions to that definition.)
In short—an "organized exchange" is defined as a type of "trading facility". To count as a trading facility", whether of the "organized exchange" type or not, you must either accept bids or offers from other participants yourself or else deterministically match and execute those bids and offers.
https://www.ams.usda.gov/mnreports/fvdidnop.pdf
Readers may wish to skip ahead to page 4, where onions are discussed.
I thought maybe they're some sort of special exotic onion variety, but I don't see anything to suggest that.
(It's primarily a novelty/art thing. But I do actually deliver the onions.)
They also got onion farmers to buy back onions they'd already sold.
I bought a box of onions from him before and they were very good. I ate those onions for a long time.
Why don't existing futures cover this? Are onions unique in how sturdy they are? You can use derivatives of the weather itself even.