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.<p>They have a website also: <a href="https://onionfutures.org" rel="nofollow">https://onionfutures.org</a>
For those who don’t know:<p><a href="https://en.wikipedia.org/wiki/Onion_Futures_Act" rel="nofollow">https://en.wikipedia.org/wiki/Onion_Futures_Act</a><p>(which also banned box office receipt futures)<p>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.
I 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?<p>Tomato: <a href="https://fred.stlouisfed.org/series/WPU01130217" rel="nofollow">https://fred.stlouisfed.org/series/WPU01130217</a>
Onion: <a href="https://fred.stlouisfed.org/series/WPU01130216" rel="nofollow">https://fred.stlouisfed.org/series/WPU01130216</a>
Lettuce: <a href="https://fred.stlouisfed.org/series/WPU01130215" rel="nofollow">https://fred.stlouisfed.org/series/WPU01130215</a>
None of the products you’ve chosen have a substantial futures market, which is why the person you responded to chose corn to make their point.
The weather affects all crops
Interesting. This would be more sensible if it was time-bound. Since the intention was clearly "stop a bad thing someone is doing right now" and not "make this field illegal forever"
So this is genuine free market activism?
This has to have been the inspiration for Milo Minderbinder cornering the cotton market in Catch-22, right?
> FAQ<p>>Is this legal?<p>>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.<p>Performance art against that law?<p>Also November onions are an absolute steal compared to the adjacent months!
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. <a href="https://farm-mp.frontpageintelligence.ai/" rel="nofollow">https://farm-mp.frontpageintelligence.ai/</a>
> The San Francisco Onion Futures Company is not a board of trade, defined as an "organized exchange or other trading facility".<p>I hate to argue but then what would they define this as, if not an organized exchange or other trading facility?
7 USC § 1a(37) defines an "organized exchange" as<p>> [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.<p>And 7 USC § 1a(51)(A) defines a "trading facility" as<p>> [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.<p>(7 USC § 1a(51)(B) then follows with some exceptions to that definition.)<p>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.
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.
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.
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?<p>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.
Between 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.
Legal defense is basically "nuh uh"
Since this may be a legal gray area, they should host it on a Tor onion site.
US Department of Agriculture publishes a national potato & onion report (issued daily!):<p><a href="https://www.ams.usda.gov/mnreports/fvdidnop.pdf" rel="nofollow">https://www.ams.usda.gov/mnreports/fvdidnop.pdf</a><p>Readers may wish to skip ahead to page 4, where onions are discussed.
Okay folks, I've got one onion for November. Charged $3.74, yours for $4.50! But hurry! By November it could be worth $9!<p>I am serious, reply here, I'll sell you my onion contract for $4.50. Who's buying?
For those unfamiliar, there's an excellent Planet Money episode on how trading onion futures got banned in the 50s.<p><a href="https://www.npr.org/sections/money/2015/10/14/448718171/episode-657-the-tale-of-the-onion-king" rel="nofollow">https://www.npr.org/sections/money/2015/10/14/448718171/epis...</a>
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.<p>I thought maybe they're some sort of special exotic onion variety, but I don't see anything to suggest that.
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?
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.<p>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.
narrowly scoped laws limit the blast radius of a stupid law without the political price of opposing a law in the aftermath of a disaster that law would have prevented. imagine if they had banned commodities trading in general!
> <i>weirdly specific brainless creatures</i><p>Legislative product management, by committee.
This one is a great example of how a Republic can avoid the worst excesses of direct Democracy<p>A direct democracy might have just banned all futures.
A guy cornered the market in the fifties, caused a scandal, they made a special exception.
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
Two guys. At one point bags of onions were being sold for less than the value of the bags they were in...<p>They also got onion farmers to buy back onions they'd already sold.
Because Vincent Kosuga.
This is a rip-off. I live in NYC and these prices are 2x to 4x what I pay for organic onions.
In an onion related note... is the "I sell onions on the internet" guy still around? I believe he was selling Vidalia onions.
It's an onion Michael, how much could it cost, $9.41?
Is the price of onions really that seasonal? Shall have to check
Looking forward to my 2 onions in November! Anyone have some good recipes?
Search for italian “soffritto” and “ragù alla bolognese”
7 onion soup is a favorite of mine. I'm vegetarian so I omit the bacon and use veggie broth.<p><a href="https://www.emerils.com/127311/seven-onion-soup-parmesan-garlic-bread" rel="nofollow">https://www.emerils.com/127311/seven-onion-soup-parmesan-gar...</a>
French onion soup [0]<p>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.<p>Few things warm your cockles this satisfyingly on a wet, dreary late-Autumn evening.<p>[0] <a href="https://www.seriouseats.com/french-onion-soup-recipe" rel="nofollow">https://www.seriouseats.com/french-onion-soup-recipe</a>
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These onion prices are quite high! The novelty probably drives up prices. Too bad there isn’t a liquid market for onions
I 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)
> 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.<p>How many times have you failed delivery where you have been able to establish contact with contract owner and they want their onions? Curious
I 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.
Hard 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.<p>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.<p>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.<p>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.<p>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.
Someone call Peter Askew, the vidalia onion guy!<p>www.onions.com
The Future's Bright.
The Future's Onion.
How many onions / lbs does a contract represent?
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.
Pricing is per onion. You could order some and weigh them, and report back.
> Let the free market reign supreme.<p>Tsk. There is no free market.
These are not forwards, not futures.
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".
I get that it’s a joke, since onion futures are illegal. But isn’t trading all futures regulated?
These are 1 onion contracts? Outrageous!
Someone at the onion needs to see this.
This is very good.
>and for hedging risks associated with weather and market fluctuations<p>Why don't existing futures cover this? Are onions unique in how sturdy they are? You can use derivatives of the weather itself even.
Can we tokenize this or get some prediction markets going on Polymarket?
I'll take 2000 please.
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Maybe I open a tor store for people trading these onions with one another?
hell yeah, based
> How are prices determined?
... using a proprietary algorithm.<p>How is this article HN newsworthy?