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I think you have a well-reasoned, thoughtful post here, but perhaps the person who operates a BBQ food truck might not be the best positioned to take futures co
by JPKab 5y ago
I think you have a well-reasoned, thoughtful post here, but perhaps the person who operates a BBQ food truck might not be the best positioned to take futures contracts out on brisket?
Scale matters.
- simtel20 5y agoAlso, aren't forward contracts by definition unsecured as compared to a futures market?? If the supplier genuinely doesn't have supply or goes out of business, you've lost your money, right?
- ska 5y agoYou can contract around anything, including penalty clauses. But yes if there isn't any X to be had, your agreement to take delivery isn't really helpful today.
- wyager 5y agoAs in the story above, you don't have to literally buy beef futures on an exchange - you can just enter into a contract with a nearby beef supplier.
- wenc 5y agoQuite right, it's just the seed of an idea. As for scale, that can be achieved through pooling (i.e. group buys), though it wouldn't work right now due to supply constraints.