What are some futures contracts that should be available, but aren't?

so there are futures contracts for frozen orange juice, electricity, bitcoin and all kinds of other random stuff in various corners of global markets

i also think there should be futures contracts for:

- price of insurance premiums, standard contract as 200x avg monthly premium of 4 person household

- plane tickets

- sashimi tuna, they already do the auctions in japan, should make the price discovery global

- alcohol since it's rather commoditized in some segments, standard contract 1000 gallons

 

There are thousands of futures that are available but liquidity are sooo bad.

so if you include futures like
plane tickets,
tuna fish, wine and those things, most likely volume traded will be zero.

 

☼ Bitcoin, et.al. (short)
☼ Lithium (no lie: https://www.cnbc.com/2017/10/04/inv...ic-car-battery-tech-mull-lithium-futures.html )
☼ Hops (long)
☼ White House staffers writing books (long)
☼ Late-night TV Comedians (short-term: long; long-term, short)
☼ Bananas (WTH?!? https://www.google.com/search?q=banana+fungus )
☼ "Retiring" Republicans (short)
☼ Health Insurance executive tenure (short)
☼ Immigrant labor (in legal, not-so-legal, asylum-seeker, DACA-eligible, and the vaunted H-1B varieties) (too much vol.)
☼ Marijuana ({sounds of inhale} longgggg)
☼ Democrats running for President (short)

 

I second that. My first company was/is actually an exchange for a commodity somewhat like this. We ended up moving to monthly auctions because it was the only way to get the liquidity required to make the market work. Building liquidity is hard business and none of the exchanges seem willing to do it, they all operate it on a "build it and they will come" model.

As an FYI there are a bunch of brokerages out there that broker all these things. It's a high touch (think steak dinners kind of thing) market which like sales requires a very specific DNA to be successful at and if you've got it you can make big bucks. But the money is in the brokering commissions, the costs are far too high to make anything trading. See Spectron, Evolution Markets, Trident...

 

i'd always been curious at how the futures markets are more concentrated than stocks, with only a few dozen actively traded futures markets, compared to thousands of liquid stocks. is this bc main participants in futures have historically been the global macro traders deploying billions, who just want to focus on analyzing big picture on a few assets, and thus gravitate to a few large pools? instead of drilling into tiny details of some obscure market where there's no capacity/ counterparty to take opposite site of trade

interesting take on the disappearance of these types of firms, i guess they're being replaced by the new generation, like XTX. there was a bloomberg article that came out about XTX's success in algo market-making, said they made around 100m annual profit, which would probably come out on higher end compared to Spectron's heyday

 

Futures for movies in development. The money would be used for financing the movie and if successful, pays off good, if not, well, you had a lottery ticket.

Life of Brian:

The film would not have been made without Python fan former Beatle George Harrison, who set up HandMade Films to help fund it at a cost of £3 million. Harrison put up the money for it as he "wanted to see the movie" — later described by Terry Jones as the "world's most expensive cinema ticket.

 

All kinds of good thought provoking questions on ET today! I'm not sure of the answer to that. I would posit that the primary reason is that stocks have a long-term bias toward the upside which is the basis for the multi-trillion dollar buy and hold investment industry, where as futures don't generally have that and require active trading? That baseline liquidity in stocks is what allows us traders to work the margins. As a secondary effect I know the futures market has always been a dark, scary place for most people who aren't seriously into this trading thing (and even some who are), so just not as accessible maybe? I like your idea as well, however its again some of the chicken and egg problem of liquidity begets liquidity so there's no counterparty/capacity because there's no volume and vice versa.

 

I'd like to see futures on credit, for example on the indices underlying LQD or HYG.

 

"What are some futures contracts that should be available, but aren't?"

This forum. I've mentioned this before to Baron in passing, I do not think he was keen on the idea.

 

Futures exchanges have tried everything conceivable. Weather, Insurance Risk, Carbon Credits... it's a long and storied list.