As a programmer and former trader at the CME, I'm not at all sure what to think about this product. It will be very interesting to watch how these contacts are priced and traded.
Why? GPUs are not perishable like onions. They do depreciate, but they don’t rot.
If you use or sell a ton of GPU time, hedging against future increases/decreases in cost per time unit is what futures are actually for. Cash vs physical settlement is irrelevant. Speculators assume the risk on the other side, typically. Nobody has enough margin in their futures account to corner the market on GPU time and there is typically a position limit for futures contracts (aside from market makers, they’re allowed unlimited futures contracts to allow hedging)
As a programmer and former trader at the CME, I'm not at all sure what to think about this product. It will be very interesting to watch how these contacts are priced and traded.
Might need to call in the Onion Futures act on this one.
https://en.wikipedia.org/wiki/Onion_Futures_Act
Why? GPUs are not perishable like onions. They do depreciate, but they don’t rot.
If you use or sell a ton of GPU time, hedging against future increases/decreases in cost per time unit is what futures are actually for. Cash vs physical settlement is irrelevant. Speculators assume the risk on the other side, typically. Nobody has enough margin in their futures account to corner the market on GPU time and there is typically a position limit for futures contracts (aside from market makers, they’re allowed unlimited futures contracts to allow hedging)
A single party controls the depreciation schedule, so that seems dicey.
This all feels like when Enron started talking about making a market for trading /bandwidth/.