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#1 29-01-2023 21:44:33

johnedward
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From: Paris - France
Registered: 21-12-2009
Posts: 3623
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Cornering a market

Cornering a market


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Cornering a market means gaining control of a significant portion of the supply of a particular commodity or asset, in order to manipulate prices to one's advantage.

This can be done by buying a large amount of the asset, or by controlling key production or distribution points.

Markets where cornering occurs
There are several different markets where market grabbing can occur, including:

Commodity markets

These are the markets where physical goods such as silver, soy beans, coffee or other items are traded.

Here, market cornering can be done to drive up the prices of the commodity in question, which can be particularly damaging to markets for essential goods.

Financial markets

They include stocks, bonds and currencies.

The hoarding of these markets can be used to manipulate stock prices, or even bond or currency prices for personal gain.

Real estate markets

This involves the buying and selling of properties such as houses, land and building complexes.

The cornering of these markets can be used to drive up property prices in some areas, making it difficult for others to buy.

Cryptocurrency markets

In recent years, market cornering in cryptos has become more common with the emergence of digital currencies like Bitcoin, Ethereum, etc.

Market cornering in these markets can be used to manipulate the prices of these digital currencies. Some have suggested that Elon Musk does this as his Tweets have sharply driven or sunk the prices of Bitcoin, to his likely personal advantage.

In all of these cases, market cornering may be illegal and may result in harm to other market participants and the overall economy.

It is often considered a form of market manipulation and is usually regulated by government agencies such as the US's Securities and Exchange Commission.

Types of market power
Poop and Scoop

Poop and scoop market cornering” is a type of market manipulation that involves sharing bad information about an asset to drive its price down before buying a large amount of it.

The idea is to buy something at an artificially low price.

Pump and Dump

Pump and Dump is a form of market manipulation in which a group of individuals, sometimes called "pumpers", artificially inflate the price of a stock or asset through false and misleading positive statements.

Once the price has been inflated by the hype, individuals "liquidate" their shares, selling them at the inflated price and causing the price to crash for unsuspecting buyers.

Market cornering refers to a situation where a trader or group of traders controls such a large percentage of a stock or commodity that they are able to manipulate the market price.

What regulations are in place to prevent market manipulation?
Several regulations are in place to prevent market hoarding, including those enforced by government agencies such as the above-mentioned SEC and the CFTC.

These regulations prohibit manipulative and fraudulent practices such as insider trading, free trades and misrepresentation of market information.

In addition, the SEC has introduced rules to prevent individual investors or groups of investors from accumulating a controlling interest in a publicly traded company without disclosing their shares to the market.

The SEC also has rules to prevent manipulation of the securities market by traders and investors. The CFTC is responsible for regulating the futures and options markets, and it also prohibits manipulative practices.

Cornering Example: Bunker Hunt and the Silver Market
In the 1970s, Bunker Hunt and his brothers Lamar and William Herbert attempted to corner the global silver market by buying large amounts of physical silver and futures.

They believed that the price of silver was undervalued and that they could make big profits by pushing the price up through their manipulation of the market.

The Hunts' purchases caused the price of silver to rise rapidly from around $1.45 an ounce in 1972 to a peak of $49 an ounce in 1979.

This led to a rush of speculators into the market as silver became a 'hot asset' which drove prices up further.

However, the Hunts' plan ultimately failed when the price of silver began to fall in 1979 and they were unable to meet their financial obligations.

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