Other examples are _all_ commodities markets like mining, logging, etc.
Of course public company share futures are inherently abstract, but they serve similar purposes, just not to a particularly similar party, depending on your perspective (of ownership, operation).
But futures aren't like that; futures are supposed to be one of the lower layers of the financial "abstraction stack", not the top layer.
Grandma doesn't buy futures; grandma invests in a mutual fund that buys futures. But Harold the wheat farmer does buy wheat futures directly, because his whole business is delivering wheat down a manufacturing pipeline, and the wheat future delivers wheat just like his own fields will, so either can be used as an input to said manufacturing pipeline. That's the original point of [commodities] futures, after all—to let Harold hedge his wheat-growing risk. The fact that they can be traded like any other instrument to make money without ever coming into possession of any commodities at all, is just a weird side-effect.
Exactly, futures are essentially the most vanilla and ancient derivative product in the world. Hammurabi's Code references them as does Aristotle.
The earliest uses have been primarily agricultural, allowing farmers to sell grain in advance for cash now and use that cash to fund operations in order to grow the grain.
True, and that's one of the reasons futures contracts spread beyond the agricultural sector, where they originated. The key difference with agriculture is that it's really easy to see how futures work--it's the model sector for futures--whereas in other sectors, they can be somewhat more nebulous.
Because perpetual future doesn't make sense for a lot of things people trade futures for: corn, soybean, crude oil. They have physical presence and in some cases an expiry date.
There are futures for other financial instruments or indexes where it might make more sense, but there the use of futures is more about hedging than owning the underlying, since it's not as complicated as owning your own crypto and keeping it safe.
Ok this might have been a bad example. I'm aware that Futures historically play a role of an insurance for food producers. Are those then by volume the major part of so called food speculation?
Wasn't the original purpose of futures to let farmers and others lock in prices early so they can mitigate risk? Speculation on futures seems dumb if you have no intention of taking delivery.
I interpreted the comment to mean something more like the derivatives market. In the derivatives market, you start getting "weird" stuff like futures contracts, collateralized debt obligations, or credit default swaps. Last two examples are, admittedly, a biased reference to 2008 since those are sort of the poster-boys of that market crash. Futures contracts aren't really that weird, but certainly more weird than just owning stock in a company.
So people might be trading (as in 2008) to "own" some N-th power representation of private debt that ends up going to zero because the underlying private debt itself was not sustainable. It's different from NFT, but for each degree of distance the financial instrument moves away from the real world, it looks increasingly weird, e.g. I own a share of insurance on a fraction of a bucket of debt people took out to buy their homes. (And I still think this is better than NFT unless the NFT has some underlying real-world thing tied to it.)
Futures and options were born from commercial needs.
Suppose you produce oranges. It'll take a few months for the harvest, and while costs are generally well understood and stable, at what price will you sell those oranges? What if by then the price of oranges tanks and you find out you're not turning a profit? This is where futures come in. The producer can sell a number of futures contract to lock in a future selling price, making cash flows much clearer and predictable.
Conversely, there's the case of a factory that needs to buy oranges for its products. They have the opposite problem and would like to make costs more predictable. Then they'd buy futures to lock in a future buying price.
This is a reason why cash settled single-stock futures are useful. They have the same economic value as a long or short share of stock, but because they're just a bet on the price, they don't have any of the awkward features that come with needing to deliver an actual share.
Other examples are _all_ commodities markets like mining, logging, etc.
Of course public company share futures are inherently abstract, but they serve similar purposes, just not to a particularly similar party, depending on your perspective (of ownership, operation).
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