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by JPKab 1838 days ago
I think you have a well-reasoned, thoughtful post here, but perhaps the person who operates a BBQ food truck might not be the best positioned to take futures contracts out on brisket?

Scale matters.

3 comments

Also, aren't forward contracts by definition unsecured as compared to a futures market?? If the supplier genuinely doesn't have supply or goes out of business, you've lost your money, right?
You can contract around anything, including penalty clauses. But yes if there isn't any X to be had, your agreement to take delivery isn't really helpful today.
Quite right, it's just the seed of an idea. As for scale, that can be achieved through pooling (i.e. group buys), though it wouldn't work right now due to supply constraints.
As in the story above, you don't have to literally buy beef futures on an exchange - you can just enter into a contract with a nearby beef supplier.