San Francisco Onion Futures Company (onionfutures.com)

173 pointsby z-mach95 hours ago62 comments

mimorigasaka 4 hours ago

The 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

a11ce 4 hours ago

Hi! 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 3 hours ago

Are you really charging $9/onion? I get upset when Safeway charges $2/lb when I can get onions for a quarter that price.

luma 3 hours ago

Priced to what the market can bear

IncreasePosts 3 hours ago

Maybe it's a really big onion

bryanrasmussen 2 hours ago

maybe it tastes more oniony than most onions, these onions are the essential onions of which other onions are mere shadows.

dcuthbertson 6 minutes ago

It's the mischief caused by shadow onions lurking in dark corners of the market bins that make me cry.

a11ce 3 hours ago

Yes, it's primarily a novelty/art thing. But I do actually deliver the onions. Prices vary.

teaearlgraycold 3 hours ago

I can confirm this person is the owner of onionfutures.com

Drupon 3 hours ago

I'm a young naive lad curious about this, have UChicago economics professors and/or grad students ever done something that might be considered like, idk, a crime against humanity stain on one's soul, in the past couple of decades?

cwal37 4 hours ago

For those who don’t know:

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 an hour ago

So this is genuine free market activism?

Barbing 4 hours 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 4 hours 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 4 hours ago

Legal defense is basically "nuh uh"

riffraff 4 hours ago

I 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 4 hours ago

Exactly 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 3 hours ago

I 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 3 hours ago

See FBT's comment below, it's about matching or being on both sides of the trade.

FBT 4 hours ago

7 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.

dougSF70 3 hours ago

I 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/

shoo 4 hours ago

US Department of Agriculture publishes a national potato & onion report (issued daily!):

https://www.ams.usda.gov/mnreports/fvdidnop.pdf

Readers may wish to skip ahead to page 4, where onions are discussed.

haakon 4 hours ago

Since this may be a legal gray area, they should host it on a Tor onion site.

thedrexster 3 hours ago

oooo, that's a missed opportunity

Reason077 4 hours ago

Are 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 4 hours ago

They are per (normal (sometimes organic) yellow) onion. Prices vary.

(It's primarily a novelty/art thing. But I do actually deliver the onions.)

kolinko an hour ago

Love it, reminds me of early days of crypto.

How do you decide upon a price?

z-mach9 3 hours ago

Looking forward to my 2 onions in November! Anyone have some good recipes?

alehrs 3 hours ago

Search for italian “soffritto” and “ragù alla bolognese”

wheybags 19 minutes ago

Someone at the onion needs to see this.

joegibbs 4 hours ago

Why 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 4 hours ago

Because Vincent Kosuga.

gostsamo 3 hours ago

A guy cornered the market in the fifties, caused a scandal, they made a special exception.

shawn_w 3 hours ago

Two 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 2 hours ago

But 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 2 hours ago

Because 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 an hour ago

Though the Hunt brothers made a pretty good run at the Silver market in 1980.

defrost an hour ago

China went all in on rare earth concentrate processing, taking the environmental hits that no one else wanted to touch.

That paid off in a concentrated lock on the bulk of rare earth applications.

pjc50 an hour ago

Because American lawmakers are weirdly specific brainless creatures. This is how you get all those laws named after individuals like Megan, and my other specific fave, the Video Rental Records Privacy Act.

Shall we address the general question of privacy, or just close the particular breach that affected a congressman? You know it's going to be the latter.

chirau 4 hours ago

In an onion related note... is the "I sell onions on the internet" guy still around? I believe he was selling Vidalia onions.

protastus 4 hours ago

It appears so! 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.

envoked 2 hours ago

For 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/epis...

not-my-account 4 hours ago

These onion prices are quite high! The novelty probably drives up prices. Too bad there isn’t a liquid market for onions

bowmessage 4 hours ago

Onion soup sounds highly fungible.

SwellJoe 2 hours ago

Maybe if you put some mushrooms in it.

retube 3 hours ago

These are not forwards, not futures.

a11ce 2 hours ago

Yeah, this is pretty much the loophole. They're never actually referred to as futures, but as "private, transferable contracts for the future physical delivery of yellow onions".

rich_sasha 3 hours ago

I get that it’s a joke, since onion futures are illegal. But isn’t trading all futures regulated?

csande17 2 hours ago

You're not really trading a future, you're just pre-ordering onions.

theogravity 4 hours ago

How many onions / lbs does a contract represent?

shoo 4 hours ago

Pricing is per onion. You could order some and weigh them, and report back.

pjscott 4 hours ago

A 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 4 hours ago

These are 1 onion contracts? Outrageous!

K0balt 3 hours ago

I know, right! Way overvalued. I’m shorting onions.

briansm 3 hours ago

The Future's Bright. The Future's Onion.

dougSF70 3 hours ago

This is very good.

charcircuit 4 hours 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 2 hours ago

Because, specifically for onions, it's infamously illegal in the US (as the site alludes to).

ElProlactin 4 hours ago

Can we tokenize this or get some prediction markets going on Polymarket?

a11ce 3 hours ago

Go for it, https://a11ce.com/#contact if you want to coordinate on any sort of derivatives

leej111 4 hours ago

Maybe I open a tor store for people trading these onions with one another?

yieldcrv 4 hours ago

hell yeah, based