San Francisco Onion Futures Company
summary
The San Francisco Onion Futures Company provides a way for individuals to buy private contracts for the physical delivery of yellow onions in the future. These contracts are transferable through unique keys, allowing buyers to potentially trade them. The service operates outside of official boards of trade to remain legally compliant. Pricing is handled by a proprietary algorithm and updated daily.
key points
- Contracts are available for delivery up to six months in advance with prices ranging from 3 to 12 USD per onion.
- Ownership is transferred via unique keys that allow new owners to update delivery information without exposing the previous owner's data.
- Physical delivery is coordinated in specific major cities like San Francisco and Toronto, with third-party options for other locations.
who should read it
People interested in novelty financial instruments or those who enjoy quirky, small-scale commercial experiments. It also appeals to individuals in the major cities where delivery is available.
discussion positive
consensus
Commenters agree that futures markets function primarily as risk-transfer mechanisms, allowing producers and consumers to hedge against price volatility rather than eliminating the volatility of the physical supply. There is a general consensus that the durability of a crop affects its price stability, with more durable goods like corn being less volatile than perishables like lettuce. The discussion also touches on the legal loopholes used by the San Francisco Onion Futures Company to operate despite the Onion Futures Act.
top insight
The distinction between 'reducing' and 'absorbing' volatility is highlighted as a key conceptual bridge; while futures cannot stop weather-induced supply shocks, they act as a financial low-pass filter that shifts the risk to speculators who are willing to bear it for a premium. This explains why participants may willingly accept small, predictable losses to avoid catastrophic, unpredictable business failure.
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