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> If you think the price of oil will be $120 after a year, you can use futures or options on futures to make this bet. If you think the S&P 500 will be over 6,5

> If you think the price of oil will be $120 after a year, you can use futures or options on futures to make this bet. If you think the S&P 500 will be over 6,500 within 2 years and the yield on 10Y Treasury bonds will be 4.25%, investment bankers will help you express this view for a fee. I’m sorry but I think the either the author or I have entirely lost the plot. Finance is a game we play to make humans better off, not to “express their views” - if you think that being able to bet on everything makes society better off, that’s an argument you can make, but it is not self evidently good to me and it is not an argument the article seems to make.

pinkmuffinere 1y ago
The author is writing creatively. s/express this view/bet on this
- dankwizard 1y ago
  And remember folks creatively does not equal good.
andy99 1y ago
Trading one thing for another is expressing your view that the latter is more valuable than the former.
fernmyth 1y ago
It is useful for humans if a farmer can lock in the price for their crop at planting time, rather than get a nasty surprise when they harvest. In financial terms, this is "selling a futures contract". It's also useful if the farmer sees a low futures price and chooses to plant something better. Likewise every producer and consumer of every crop, metal, hydrocarbon, etc. Agreed that this author and the industry as a whole go too far in the direction of finance for finance's sake.
JackFr 1y ago
In commodities and certain derivative markets, hedgers need to be matched with speculators. Hedgers are offsetting risk to speculators. Thus a farmer can insulate themselves against a drop in the price of corn and an airline can insulate themselves against a jet fuel hike. To do that someone has to take that risk. It might by to satisfy their risk appetite which will be tied to returns.
- mattnewton 1y ago
  I think I understand that. I don’t see how it self evidently is good for hypothetical burrito sellers to financialize their industry follows from that. There are a lot of differences between agricultural crops and take out, and financialization has costs. Being able to bet on something isn’t inherently good, but the article seems to treat that as axiomatically true without offering an explanation about the problem financialization is solving in the BNPL burrito delivery space, like you have for airlines and farmers.

pinkmuffinere 1y ago

The author is writing creatively. s/express this view/bet on this

dankwizard 1y ago
And remember folks creatively does not equal good.

andy99 1y ago

Trading one thing for another is expressing your view that the latter is more valuable than the former.

fernmyth 1y ago

It is useful for humans if a farmer can lock in the price for their crop at planting time, rather than get a nasty surprise when they harvest. In financial terms, this is "selling a futures contract". It's also useful if the farmer sees a low futures price and chooses to plant something better. Likewise every producer and consumer of every crop, metal, hydrocarbon, etc. Agreed that this author and the industry as a whole go too far in the direction of finance for finance's sake.

JackFr 1y ago

In commodities and certain derivative markets, hedgers need to be matched with speculators. Hedgers are offsetting risk to speculators. Thus a farmer can insulate themselves against a drop in the price of corn and an airline can insulate themselves against a jet fuel hike. To do that someone has to take that risk. It might by to satisfy their risk appetite which will be tied to returns.

mattnewton 1y ago
I think I understand that. I don’t see how it self evidently is good for hypothetical burrito sellers to financialize their industry follows from that. There are a lot of differences between agricultural crops and take out, and financialization has costs. Being able to bet on something isn’t inherently good, but the article seems to treat that as axiomatically true without offering an explanation about the problem financialization is solving in the BNPL burrito delivery space, like you have for airlines and farmers.