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.
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.
teaearlgraycold 1 hours ago [-]
I can confirm this person is the owner of onionfutures.com
what 2 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.
a11ce 1 hours ago [-]
Yes, it's primarily a novelty/art thing. But I do actually deliver the onions. Prices vary.
luma 2 hours ago [-]
Priced to what the market can bear
IncreasePosts 1 hours ago [-]
Maybe it's a really big onion
bryanrasmussen 5 minutes ago [-]
maybe it tastes more oniony than most onions, these onions are the essential onions of which other onions are mere shadows.
Drupon 1 hours ago [-]
[flagged]
Drupon 1 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?
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.
Barbing 3 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!
dougSF70 1 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/
hyperhello 3 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?
FBT 2 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.
riffraff 2 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 2 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 2 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 1 hours ago [-]
See FBT's comment below, it's about matching or being on both sides of the trade.
quirkot 3 hours ago [-]
Legal defense is basically "nuh uh"
shoo 2 hours ago [-]
US Department of Agriculture publishes a national potato & onion report (issued daily!):
Readers may wish to skip ahead to page 4, where onions are discussed.
haakon 2 hours ago [-]
Since this may be a legal gray area, they should host it on a Tor onion site.
thedrexster 60 minutes ago [-]
oooo, that's a missed opportunity
Reason077 2 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 2 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.)
viccis 1 hours ago [-]
[flagged]
envoked 36 minutes ago [-]
For those unfamiliar, there's an excellent Planet Money episode on how trading onion futures got banned in the 50s.
Looking forward to my 2 onions in November! Anyone have some good recipes?
alehrs 2 hours ago [-]
Search for italian “soffritto” and “ragù alla bolognese”
viccis 1 hours ago [-]
[flagged]
joegibbs 2 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 2 hours ago [-]
Because Vincent Kosuga.
gostsamo 2 hours ago [-]
A guy cornered the market in the fifties, caused a scandal, they made a special exception.
joegibbs 51 minutes 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 19 minutes 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.
shawn_w 1 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.
chirau 2 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.
I bought a box of onions from him before and they were very good. I ate those onions for a long time.
not-my-account 3 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 2 hours ago [-]
Onion soup sounds highly fungible.
SwellJoe 43 minutes ago [-]
Maybe if you put some mushrooms in it.
retube 1 hours ago [-]
These are not forwards, not futures.
a11ce 37 minutes 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 1 hours ago [-]
I get that it’s a joke, since onion futures are illegal. But isn’t trading all futures regulated?
csande17 4 minutes ago [-]
[delayed]
theogravity 3 hours ago [-]
How many onions / lbs does a contract represent?
pjscott 2 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.
shoo 2 hours ago [-]
Pricing is per onion. You could order some and weigh them, and report back.
briansm 2 hours ago [-]
The Future's Bright.
The Future's Onion.
wocram 3 hours ago [-]
These are 1 onion contracts? Outrageous!
K0balt 1 hours ago [-]
I know, right! Way overvalued. I’m shorting onions.
dougSF70 1 hours ago [-]
This is very good.
charcircuit 2 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 37 minutes ago [-]
Because, specifically for onions, it's infamously illegal in the US (as the site alludes to).
ElProlactin 2 hours ago [-]
Can we tokenize this or get some prediction markets going on Polymarket?
They have a website also: https://onionfutures.org
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.
>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!
I hate to argue but then what would they define this as, if not an organized exchange or other trading facility?
> [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.
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.
https://www.ams.usda.gov/mnreports/fvdidnop.pdf
Readers may wish to skip ahead to page 4, where onions are discussed.
I thought maybe they're some sort of special exotic onion variety, but I don't see anything to suggest that.
(It's primarily a novelty/art thing. But I do actually deliver the onions.)
https://www.npr.org/sections/money/2015/10/14/448718171/epis...
They also got onion farmers to buy back onions they'd already sold.
I bought a box of onions from him before and they were very good. I ate those onions for a long time.
Why don't existing futures cover this? Are onions unique in how sturdy they are? You can use derivatives of the weather itself even.