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San Francisco Onion Futures Company
- Barbing 1mo ago> FAQ >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!
- hyperhello 1mo ago> The San Francisco Onion Futures Company is not a board of trade, defined as an "organized exchange or other trading facility". I hate to argue but then what would they define this as, if not an organized exchange or other trading facility?
- quirkot 1mo agoLegal defense is basically "nuh uh"
- riffraff 1mo agoI think their point is there's no "peer to peer" trading so it's not an exchange. You're always contracting futures with them, so it's more like a vegetables seller than a trading facility.
- a11ce 1mo agoExactly right. You're able to privately resell contract keys (and the buyer can then re-issue a new key with their delivery info, voiding the old one), but onionfutures.com doesn't facilitate it.
- altmanaltman 1mo agoI mean, it kind of does, though, no? Since it is backing the contract in the first place? Why else would anyone buy those contracts if they didn't know they have value provided by onionfutures.com in the first place? Why can't I just sell a fake key, claim it'll work, and make unlimited money this way if that wasn't the case? The specific laws do not actually ban the transfer of those contracts (tbf this is very complex and depends on your reading). And yes they do not facilitate the trading of the instruments in the secondary market but they absolutely facilitate the instruments themselves otherwise there cannot be a secondary market without any backers of the instruments.
- a11ce 1mo agoSee FBT's comment below, it's about matching or being on both sides of the trade.
- sokoloff 1mo agoBetween CBOE and OCC, that’s (exactly?) how options trading works as well, and I don’t think anyone claims that CBOE is not an exchange.
- FBT 1mo ago7 USC § 1a(37) defines an "organized exchange" as > [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.
- lq9AJ8yrfs 1mo agoBroker or dealer. Per the interwebs, a broker acts on behalf of another party, vs a dealer trades for themselves. As distinguished from an exchange, where the exchange intermediates and becomes a middle party "simultaneously" to both sides. The market dynamics are pretty different between broker dealers and exchanges. For instance a /ticker/ as a concept makes sense only with an exchange. The exchanges basically pick up only the contracts or goods with the most volume and standardized & predictable goods. To trade more exotic or niche things basically you have to find your own counterparty, versus the exchange acts as an "typical" buyer and seller to each side (assuming there is anyone there at all to participate on each side... giving rise to the concept of market makers who undertake to do just that, i.e., to be ready to trade either side at any time in a certain good).
- dougSF70 1mo agoI believe 10/15 is a huge harvest day for Vidalia(??) Onions so crop will be scarce leading up to the harvest. As my multi-player free farming simulator has shown me. https://farm-mp.frontpageintelligence.ai/ https://farm-mp.frontpageintelligence.ai/
- conorcleary 1mo agoThis is really neat, but, the wages and other costs are way too ballooned to envision as a simulator parallel to 'real life' farming.
- HnUser12 1mo agoApparently I cannot join. It says the world is full. Did all of HN join?
- dougSF70 1mo agoI am increasing the number of farms allowed...try in a couple of minutes
- asdfasvea 1mo agoNovember pumpkins is where the money is.
- cwal37 1mo agoFor those who don’t know: https://en.wikipedia.org/wiki/Onion_Futures_Act 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.
- lukan 1mo agoSo this is genuine free market activism?
- Avicebron 1mo agoWhat will the kids think up next?
- chirau 1mo agoI 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: https://fred.stlouisfed.org/series/WPU01130217 https://fred.stlouisfed.org/series/WPU01130217 Onion: https://fred.stlouisfed.org/series/WPU01130216 https://fred.stlouisfed.org/series/WPU01130216 Lettuce: https://fred.stlouisfed.org/series/WPU01130215 https://fred.stlouisfed.org/series/WPU01130215
- gradus_ad 1mo agoThe weather affects all crops
- vishalontheline 1mo agoAnd the cost of transportation.
- brookst 1mo agoBut isn’t the point that futures trading reduces volatility from things like weather?
- not-my-account 1mo agoThese onion prices are quite high! The novelty probably drives up prices. Too bad there isn’t a liquid market for onions
- bowmessage 1mo agoOnion soup sounds highly fungible.
- leej111 1mo agoMaybe I open a tor store for people trading these onions with one another?
- theogravity 1mo agoHow many onions / lbs does a contract represent?
- shoo 1mo agoPricing is per onion. You could order some and weigh them, and report back.
- pjscott 1mo agoA contract represents a set of (quantity, month) tuples, where quantity is an integer greater than zero; that number of yellow onions will be delivered in the corresponding month to the current holder of the contract. The mass of each onion is unspecified, as is the mean and variance of the underlying onion-mass distribution from which they are drawn.
- wocram 1mo agoThese are 1 onion contracts? Outrageous!
- K0balt 1mo agoI know, right! Way overvalued. I’m shorting onions.
- yieldcrv 1mo agohell yeah, based
- ElProlactin 1mo agoCan we tokenize this or get some prediction markets going on Polymarket?
- a11ce 1mo agoGo for it, https://a11ce.com/#contact https://a11ce.com/#contact if you want to coordinate on any sort of derivatives
- joegibbs 1mo agoWhy was the law against onion futures passed in the first place? Couldn’t the same scheme be done with garlic, or sweet potatoes, or turnips or something?
- chirau 1mo agoBecause Vincent Kosuga.
- gostsamo 1mo agoA guy cornered the market in the fifties, caused a scandal, they made a special exception.
- shawn_w 1mo agoTwo guys. At one point bags of onions were being sold for less than the value of the bags they were in... They also got onion farmers to buy back onions they'd already sold.
- joegibbs 1mo agoBut what I’m saying is, why did they only cover onions? I don’t think there’s anything stopping someone from cornering the market in other commodities just as easily
- weakened_malloc 1mo agoBecause the size of the market was/is so small that you're actually able to corner it. Oil or Treasury futures are far too big that no single person could ever corner it.
- microtherion 1mo agoThough the Hunt brothers made a pretty good run at the Silver market in 1980.
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- mimorigasaka 1mo agoThe people behind this are a real (if silly) student organization at UChicago and Northwestern campaigning for the legalization of onion futures trading. Sometimes they will aggressively hand out free onions to passerby on campus. It's quite entertaining. They have a website also: https://onionfutures.org https://onionfutures.org
- a11ce 1mo agoHi! I'm the proprietor of onionfutures.com. I'm actually not a member of UChicago for Our Futures and came up with the idea independently, but we've since connected and they handle our Chicago deliveries.
- what 1mo agoAre you really charging $9/onion? I get upset when Safeway charges $2/lb when I can get onions for a quarter that price.
- luma 1mo agoPriced to what the market can bear
- IncreasePosts 1mo agoMaybe it's a really big onion
- bryanrasmussen 1mo agomaybe it tastes more oniony than most onions, these onions are the essential onions of which other onions are mere shadows.
- dcuthbertson 1mo agoIt's the mischief caused by shadow onions lurking in dark corners of the market bins that make me cry.
- shoo 1mo agoUS Department of Agriculture publishes a national potato & onion report (issued daily!): https://www.ams.usda.gov/mnreports/fvdidnop.pdf https://www.ams.usda.gov/mnreports/fvdidnop.pdf Readers may wish to skip ahead to page 4, where onions are discussed.
- boscillator 1mo agoThey have what appears to be a screenshot of an excel document (complete with sort and filter widgets), except I can select the text, so perhaps it's an embedded excel sheet inside a word doc? Either way, I love it and I'm always excited to learn about what mundane functions the government and MS Office are keeping alive for society.
- chirau 1mo agoIn an onion related note... is the "I sell onions on the internet" guy still around? I believe he was selling Vidalia onions.
- protastus 1mo agoIt appears so! https://www.vidaliaonions.com/ https://www.vidaliaonions.com/ I bought a box of onions from him before and they were very good. I ate those onions for a long time.
- deleted 1mo ago[deleted]
- eightturn 1mo agopeter here... sincerely appreciate your business.
- eightturn 1mo agoI'm still here : ) just finished up year 11.
- haakon 1mo agoSince this may be a legal gray area, they should host it on a Tor onion site.
- thedrexster 1mo agooooo, that's a missed opportunity
- charcircuit 1mo ago>and for hedging risks associated with weather and market fluctuations Why don't existing futures cover this? Are onions unique in how sturdy they are? You can use derivatives of the weather itself even.
- tesseract 1mo agoBecause, specifically for onions, it's infamously illegal in the US (as the site alludes to).
- charcircuit 1mo agoIt's not illegal for onion farmers to buy weather futures.
- Reason077 1mo agoAre these contract prices really "per onion"? Or are they actually per pound or per kg? Up to $9.39 seems very expensive if it's really the price for a single onion. I thought maybe they're some sort of special exotic onion variety, but I don't see anything to suggest that.
- a11ce 1mo agoThey are per (normal (sometimes organic) yellow) onion. Prices vary. (It's primarily a novelty/art thing. But I do actually deliver the onions.)
- viccis 1mo ago[flagged]
- kolinko 1mo agoLove it, reminds me of early days of crypto. How do you decide upon a price?
- conorcleary 1mo agothe pizza to onion ratio of course
- a11ce 1mo agoI don't want to give too many details, but I will say if you graph prices over time it looks a lot like a market price. Maybe I should add a price history page to demonstrate that it's not noise...
- mhh__ 1mo agoAll you need to do is quite a price that isn't vulnerable to arbitrage. As a dealer you should then charge a spread atop of that to cover make a profit after costs and adverse selection (even if trading was free you should charge a spread to protect you against informed traders)
- z-mach9 1mo agoLooking forward to my 2 onions in November! Anyone have some good recipes?
- alehrs 1mo agoSearch for italian “soffritto” and “ragù alla bolognese”
- viccis 1mo ago[flagged]
- janfoeh 1mo agoFrench onion soup [0] Some personal preference not covered in that recipe: do not caramelise all your onion; instead, keep a quarter and add it in after you have caramelised the rest. This gives a bit more variety in terms of taste and texture. Few things warm your cockles this satisfyingly on a wet, dreary late-Autumn evening. [0] https://www.seriouseats.com/french-onion-soup-recipe https://www.seriouseats.com/french-onion-soup-recipe
- astura 1mo ago7 onion soup is a favorite of mine. I'm vegetarian so I omit the bacon and use veggie broth. https://www.emerils.com/127311/seven-onion-soup-parmesan-garlic-bread https://www.emerils.com/127311/seven-onion-soup-parmesan-gar...
- rich_sasha 1mo agoI get that it’s a joke, since onion futures are illegal. But isn’t trading all futures regulated?
- briansm 1mo agoThe Future's Bright. The Future's Onion.
- Drupon 1mo ago[flagged]
- Drupon 1mo ago[flagged]
- dougSF70 1mo agoThis is very good.
- retube 1mo agoThese are not forwards, not futures.
- envoked 1mo agoFor those unfamiliar, there's an excellent Planet Money episode on how trading onion futures got banned in the 50s. https://www.npr.org/sections/money/2015/10/14/448718171/episode-657-the-tale-of-the-onion-king https://www.npr.org/sections/money/2015/10/14/448718171/epis...
- wheybags 1mo agoSomeone at the onion needs to see this.
- gorgoiler 1mo agoHard to take this seriously when it just lists “onion” as the commodity. The onion we extract from the ground is not the same everywhere. Onion can be either light or heavy based on the size and density. Light onion will roll more easily than thicker, "heavy" onion. The sulfur content also affects the onion quality and price: “sweet” onion has low sulfur content, “sour” onion has high. Sweet onion can be used much more easily than sour onion, which requires more culinary processing to extract the sulfur compounds that make you smelly and your eyes water. Onion has been shown to have a negative impact on climate, especially on air quality with people in confined spaces after lunch, but despite this it continues to be a valuable resource that is processed into many everyday foodstuffs: white, yellow, red, salad, and for specialist applications the highly refined shallot and pearl compounds as well. Alas it seems likely that geopolitical upheaval will mean onion trading at ever higher prices. Brest Roscoff Intermediate (light, sweet onion) is trading over $8 a bunch (yes, crude onion is traded in weird units!) since the war began. There’s also a bright future for synthetic. environmentally friendlier onion! Hydroponically grown scallions — so called “green” onion — have some interesting applications in the aerospace industry e.g. in-flight sandwiches and salads.
- Barbing 1mo agoYou could do standup probably
- onion2k 1mo agoI'll take 2000 please.
- stevefan1999 1mo ago> Let the free market reign supreme. Tsk. There is no free market.
- PowerElectronix 1mo agoI can't wait until someone tries to corner the market, holds a shitton of future onions, the onions go bad and the market implodes showing that future contracts on perishable items is generally a bad idea.
- dnautics 1mo agoFuture contracts on perishable items are executed all the time.
- chadgpt6 1mo agoThat's half the reason we have futures contracts. If they were only on nonperishable goods you could just buy the goods and store them in a warehouse. Futures contracts allow you to do something similar with perishables.
- PowerElectronix 1mo agoI can't short onion futures? Why? Buying the nov. Contract and selling the dec. Would net a >100% return on a month (minus the freezing cost of the onions)
- wavemode 1mo agoYou can, since the contracts are transferrable. But SFOFC is not an exchange so you'd have to find a buyer yourself.
- monkeydust 1mo ago> Please note that although we will do our best to contact you and deliver your onions, no refunds are offered even in the case of a failed delivery. How many times have you failed delivery where you have been able to establish contact with contract owner and they want their onions? Curious
- a11ce 1mo agoA few people have ghosted me after establishing contact. I think some people think it's not worth the coordination effort or didn't expect it to be real in the first place.
- cushychicken 1mo agoSomeone call Peter Askew, the vidalia onion guy! www.onions.com
- eightturn 1mo agohaha : )
- padjo 1mo agoIt's an onion Michael, how much could it cost, $9.41?
- theturtle 1mo ago[dead]
- mrbluecoat 1mo ago> How are prices determined? ... using a proprietary algorithm. How is this article HN newsworthy?
- Stitch4223 1mo agoFor various reasons. From what I get from it, it describes a complex technical + social system that has been exploited to the max leading to insane pricing, risks and a ban. They want to do that again it seems. That this specific algorithm isn’t revealed is the joke: it’s a complete fraud, their secret uber elite algorithm will favor nobody except the owners obviously. It’s super nerdy and it took some effort, at least for me, to understand the fun. I might have completely missed the mark as everything about this subject, such as the Wikipedia article and so on are completely new to me.
- mhh__ 1mo agoIs the price of onions really that seasonal? Shall have to check
- jordan1212k 1mo agoThis is a rip-off. I live in NYC and these prices are 2x to 4x what I pay for organic onions.
- ivraatiems 1mo agoThese aren't onions, these are onion futures! You can buy a physical onion now for one price, but you can't buy the promise of an onion later!
- ivraatiems 1mo agoOkay folks, I've got one onion for November. Charged $3.74, yours for $4.50! But hurry! By November it could be worth $9! I am serious, reply here, I'll sell you my onion contract for $4.50. Who's buying?
- deleted 1mo ago[deleted]
- solaarphunk 1mo agoI see a future for a bananacoin collab
- BigTTYGothGF 1mo agoWe as a society seem to have done OK without onion futures for these past 70 years, makes you wonder what other futures trading we could do without.
- kotaKat 1mo agoI would like the ability to: 1: have a QR code to 'claim' a key (eg, so I can print the future out onto a card and hand it to someone) and 2: have the QR code allow me to claim multiple keys at once (eg, to allow me to sell multiple onions in one QR coded 'bag' of keys). Getting some ideas on how to sell some onions locally. Maybe even an onion kiosk. Put cash in, get onions later. Or an arbitraged webfront to sell the onions via.
- WhatsTheBigIdea 1mo agoI'm down to buy some onions. But the interface lacks units. Are these big onions or small onions? Typically, I buy onions by the pound here in San Francisco.
- tomcam 1mo agoAt last, the final piece of my retirement portfolio drops neatly into place
- owencmcgrath 1mo agoa random walk down wall street never said anything about onion futures!
- hbarka 1mo agoCan you add olive oil, coffee beans, and firewood?
- Tossrock 1mo agoLaying the groundwork for The Onion Knight, no doubt: https://www.astralcodexten.com/p/the-onion-knight https://www.astralcodexten.com/p/the-onion-knight