Cornering the market
The term Cornering a market referred to in the economic sense, the Erlangen extensive control over a commodity or a security, but without reaching a monopoly. This makes it possible to determine the price. Well-known examples are Microsoft ( desktop operating systems) or Wal- Mart (supermarkets in the U.S.).
A market " Cornern ", there are various strategies. The most common is to buy up a large percentage of a commodity offered a niche market and hoard. With the advent of futures trading, there was the opportunity to purchase a large number of Futures of goods and after the price has increased due to the scarcity repel.
Under certain circumstances, constitute a form of market manipulation, the " Cornern "; in the case of securities " Cornerns " this would be in Germany according to § 20a para 1 No. 2 WpHG prohibited. This prohibits, " make transactions or purchase or to give orders to trade are likely to give, false or misleading signals as to the supply, demand or the stock exchange or market price of financial instruments or to bring about an artificial price level ".
Prerequisite for the potential success of the " Cornerns " is a relatively narrow market, significant financial resources and a department with limited possibilities of substitution by other products. In the story, a number of attempts by the financial " Cornerns " have survived. Most failed. Successful run "cornering " experiments that aim to gain a large market share as possible and thus a dominant position. Examples are Microsoft or IBM.
Examples
The most famous attempt to cornern a market that was the silver speculation of the Hunt brothers. Since the mid- 1970s, the Hunts and their partners bought 150 million ounces ( about 5,000 tons ) physical silver and 200 million ounces of silver in the commodity futures exchange Comex in New York. The price of silver was thus driven from 2 to 50 U.S. dollars per ounce, to the speculation collapsed in 1980. The price is normalized in the short term; the Hunt Brothers went bankrupt.