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YC has funded a ton of great financial companies eg. Coinbase, One Chronos, etc. We're a derivative exchange regulated by the CFTC. We're no more gambling than
by tmansour 4y ago
YC has funded a ton of great financial companies eg. Coinbase, One Chronos, etc.
We're a derivative exchange regulated by the CFTC. We're no more gambling than grain futures are!
- pizzalife 4y agoYou're not a financial company. Grain futures have an actual use. Come on now. You're insulting the reader base here.
- nl 4y agoThere are a vast number of use cases here. A simple one is the peak mortgage rate market[1]. That allows you to create hedges against movement on variable rate homeloans directly. There's a number of unemployment-related markets that allow you to create insurance for yourself against unemployment. And these are just things I've thought up of in a couple of minutes, not even considering what actual financial markets might want to use them for. [1] https://kalshi.com/events/FRMMAX-22DEC29/markets/FRMMAX-22DEC29-P7.5 https://kalshi.com/events/FRMMAX-22DEC29/markets/FRMMAX-22DE...
- renewiltord 4y agoThat's neat but how does one hedge a $800k loan with a max position of $25k? Idea seems spurious. The difference is substantially higher. Compare a pre-hike 2.8% with a present 6.8%. Your $25k hedge is going to be pointless.
- tmansour 4y agoIt's 25k downside exposure limit (doesn't mean your upside is capped at 25k). Also even if you can't hedge the exposure in its totality, it is still worth hedging a fraction of it. "Under-hedging" is a common term in commodities markets - people often want to cover a portion of their exposure and leave the rest in the hands of mother nature.
- renewiltord 4y agoUseful to know.
- tmansour 4y ago+1 on this answer - there's a ton more examples here: student loans, climate policy, hurricanes, inflation, etc.
- deleted 4y ago[deleted]