In retirement, he now runs a sophisticated self-designed program that helps micro-analyze statistical behavior of the up-and-down pricing movement that underlies the pricing behavior of the futures market.
Until about 1710, only physical rice was traded but then a futures market emerged where "coupons", promising delivery of rice at a future time, began to be issued.
The offsetting of long positions with short futures would only appear to be naked, as participants to the futures market are under no obligation to divulge their hedge.
However, this method is the least used because it requires some knowledge of production costs and the willingness of both sides to take a risk in the futures market.
