Cornering the market - Revision history

imported>AnomieBOT: Dating maintenance tags: {{As of}}

2025-12-03T23:44:58Z

Dating maintenance tags: {{As of}}

← Previous revision		Revision as of 23:44, 3 December 2025
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	{{Short description\|Commerce phenomenon}}		{{Short description\|Commerce phenomenon}}
	[[File:Gold price in USD.png\|thumb\|Following an attempt at cornering the silver market by the Hunt brothers in 1980, gold and silver prices briefly spiked in an event referred to as [[Silver Thursday]].]]		{{Competition law}}
	In [[~~finance~~]], '''cornering the market''' consists of obtaining sufficient control of a particular [[stock]], [[commodity]], or other [[asset]] in an attempt to [[~~market manipulation~~\|~~manipulate~~]] ~~the market price~~.		In [[competition law]], '''cornering the market''' consists of obtaining sufficient control of a particular [[stock]], [[commodity]], [[human capital]] or other [[asset]] in an attempt to reduce [[Competition (economics)\|competition]].

	Companies that have cornered their markets have usually done so in an attempt to gain greater leeway in their decisions; for example, they may desire to charge higher prices for their products without fears of losing too much business. The cornerer hopes to gain control of enough of the [[supply and demand\|supply]] of the commodity to be able to set the price for it.		Companies that have cornered their markets have usually done so in an attempt to gain greater leeway in their decisions; for example, they may desire to charge higher prices for their products without fears of losing too much business. The cornerer hopes to gain control of enough of the [[supply and demand\|supply]] of the commodity to be able to set the price for it.
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	===1950s: The onion market===		===1950s: The onion market===
	In the late 1950s, [[United States]] [[onion]] [[farmer]]s alleged that Sam Seigel and [[Vincent Kosuga]], [[Chicago Mercantile Exchange]] traders, were attempting to corner the market on onions. Their complaints resulted in the passage of the [[Onion Futures Act]], which banned trading in onion futures in the United States and remains in effect {{As of\|~~2024~~\|lc=on}}.<ref>{{cite news\|first=Keith\|last=Romer\|title=The Great Onion Corner And The Futures Market\|url=https://www.npr.org/2015/10/22/450769853/the-great-onion-corner-and-the-futures-market\|newspaper=[[NPR]]\|date=22 October 2015\|access-date=22 October 2015\|archive-date=23 October 2015\|archive-url=https://web.archive.org/web/20151023052734/http://www.npr.org/2015/10/22/450769853/the-great-onion-corner-and-the-futures-market\|url-status=live}}</ref>		In the late 1950s, [[United States]] [[onion]] [[farmer]]s alleged that Sam Seigel and [[Vincent Kosuga]], [[Chicago Mercantile Exchange]] traders, were attempting to corner the market on onions. Their complaints resulted in the passage of the [[Onion Futures Act]], which banned trading in onion futures in the United States and remains in effect {{As of\|2025\|12\|03\|lc=on}}.<ref>{{cite news\|first=Keith\|last=Romer\|title=The Great Onion Corner And The Futures Market\|url=https://www.npr.org/2015/10/22/450769853/the-great-onion-corner-and-the-futures-market\|newspaper=[[NPR]]\|date=22 October 2015\|access-date=22 October 2015\|archive-date=23 October 2015\|archive-url=https://web.archive.org/web/20151023052734/http://www.npr.org/2015/10/22/450769853/the-great-onion-corner-and-the-futures-market\|url-status=live}}</ref>

	===1970s: The Hunt brothers and the silver market===		===1970s: The Hunt brothers and the silver market===
			[[File:Gold price in USD.png\|thumb\|Following an attempt at cornering the silver market by the Hunt brothers in 1980, gold and silver prices briefly spiked in an event referred to as [[Silver Thursday]].]]
	Brothers [[Nelson Bunker Hunt]] and [[William Herbert Hunt]] attempted to corner the world [[silver]] markets in the late 1970s and early 1980s, at one stage holding the rights to more than half of the world's deliverable silver.<REF NAME="TEXAS">{{Cite magazine		Brothers [[Nelson Bunker Hunt]] and [[William Herbert Hunt]] attempted to corner the world [[silver]] markets in the late 1970s and early 1980s, at one stage holding the rights to more than half of the world's deliverable silver.<REF NAME="TEXAS">{{Cite magazine
	\| last = Gwynne		\| last = Gwynne
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	===2008: Porsche and shares in Volkswagen===		===2008: Porsche and shares in Volkswagen===
	During the [[2008 financial crisis]], [[Porsche]] cornered the market in shares of [[Volkswagen]], which briefly saw Volkswagen become the world's most valuable company.<ref>{{Cite news \| title = Hedge funds make £18bn loss on VW \| publisher = [[BBC]] \| date = 2008-10-29 \| url = ~~http~~://news.bbc.co.uk/1/hi/business/7697082.stm \| access-date = 2010-07-05 \| archive-date = 2009-01-25 \| archive-url = https://web.archive.org/web/20090125144950/http://news.bbc.co.uk/1/hi/business/7697082.stm \| url-status = live }}</ref> Porsche claimed that its actions were intended to gain control of Volkswagen rather than to manipulate the market: in this case, while cornering the market in Volkswagen shares, Porsche contracted with [[naked shorts]]—resulting in a [[short squeeze]] on them.<ref>{{Cite news \| title = Squeezy money \| newspaper = Economist \| date = 2008-10-30 \| access-date = 2008-11-01 \| url = http://www.economist.com/finance/displaystory.cfm?story_id=12523898 \| archive-date = 2008-11-03 \| archive-url = https://web.archive.org/web/20081103083148/http://www.economist.com/finance/displaystory.cfm?story_id=12523898 \| url-status = live }};		During the [[2008 financial crisis]], [[Porsche]] cornered the market in shares of [[Volkswagen]], which briefly saw Volkswagen become the world's most valuable company.<ref>{{Cite news \| title = Hedge funds make £18bn loss on VW \| publisher = [[BBC]] \| date = 2008-10-29 \| url = https://news.bbc.co.uk/2/hi/business/7697082.stm \| access-date = 2010-07-05 \| archive-date = 2009-01-25 \| archive-url = https://web.archive.org/web/20090125144950/http://news.bbc.co.uk/1/hi/business/7697082.stm \| url-status = live }}</ref> Porsche claimed that its actions were intended to gain control of Volkswagen rather than to manipulate the market: in this case, while cornering the market in Volkswagen shares, Porsche contracted with [[naked shorts]]—resulting in a [[short squeeze]] on them.<ref>{{Cite news \| title = Squeezy money \| newspaper = Economist \| date = 2008-10-30 \| access-date = 2008-11-01 \| url = http://www.economist.com/finance/displaystory.cfm?story_id=12523898 \| archive-date = 2008-11-03 \| archive-url = https://web.archive.org/web/20081103083148/http://www.economist.com/finance/displaystory.cfm?story_id=12523898 \| url-status = live }};
	[https://www.nytimes.com/2008/10/31/business/worldbusiness/31norris.html "A Clever Move by Porsche on VW’s Stock"] {{Webarchive\|url=https://web.archive.org/web/20170411193627/http://www.nytimes.com/2008/10/31/business/worldbusiness/31norris.html \|date=2017-04-11 }}, [[The New York Times]];		[https://www.nytimes.com/2008/10/31/business/worldbusiness/31norris.html "A Clever Move by Porsche on VW’s Stock"] {{Webarchive\|url=https://web.archive.org/web/20170411193627/http://www.nytimes.com/2008/10/31/business/worldbusiness/31norris.html \|date=2017-04-11 }}, [[The New York Times]];
	[https://www.telegraph.co.uk/finance/globalbusiness/3362913/Porsche-crashes-into-controversy-in-the-ultimate-short-squeeze.html "Porsche crashes into controversy in the ultimate 'short squeeze'"] {{Webarchive\|url=https://web.archive.org/web/20210227050139/https://www.telegraph.co.uk/finance/globalbusiness/3362913/Porsche-crashes-into-controversy-in-the-ultimate-short-squeeze.html \|date=2021-02-27 }}, [[The Daily Telegraph]]</ref> It was ultimately unsuccessful, leading to the resignation of Porsche's chief executive and financial director and to the merger of Porsche into Volkswagen.<ref>{{Cite news \| title = VW prepares to take over Porsche \| publisher = [[BBC]] \| date = 2009-07-23 \| url = ~~http~~://news.bbc.co.uk/1/hi/business/8165524.stm \| access-date = 2010-07-05 \| archive-date = 2023-08-11 \| archive-url = https://web.archive.org/web/20230811215815/http://news.bbc.co.uk/2/hi/business/8165524.stm \| url-status = live }}</ref>		[https://www.telegraph.co.uk/finance/globalbusiness/3362913/Porsche-crashes-into-controversy-in-the-ultimate-short-squeeze.html "Porsche crashes into controversy in the ultimate 'short squeeze'"] {{Webarchive\|url=https://web.archive.org/web/20210227050139/https://www.telegraph.co.uk/finance/globalbusiness/3362913/Porsche-crashes-into-controversy-in-the-ultimate-short-squeeze.html \|date=2021-02-27 }}, [[The Daily Telegraph]]</ref> It was ultimately unsuccessful, leading to the resignation of Porsche's chief executive and financial director and to the merger of Porsche into Volkswagen.<ref>{{Cite news \| title = VW prepares to take over Porsche \| publisher = [[BBC]] \| date = 2009-07-23 \| url = https://news.bbc.co.uk/2/hi/business/8165524.stm \| access-date = 2010-07-05 \| archive-date = 2023-08-11 \| archive-url = https://web.archive.org/web/20230811215815/http://news.bbc.co.uk/2/hi/business/8165524.stm \| url-status = live }}</ref>

	One of the wealthiest men in Germany's industry, [[Adolf Merckle]], died by suicide after shorting Volkswagen shares.<ref>{{cite news \| title = Adolf Merckle, German tycoon who lost millions on VW shares, commits suicide \| newspaper = [[The Sunday Times]] \| date = 2009-01-07 \| url = http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5460281.ece \| location = London \| first = Roger \| last = Boyes \| access-date = 2010-10-31 \| archive-date = 2011-06-12 \| archive-url = https://web.archive.org/web/20110612030743/http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5460281.ece \| url-status = dead }}</ref><ref>{{Cite news \| title = Der Tag, als die VW-Aktie 1.000 Euro kostete \| publisher = [[Tagesschau (German TV series)]] \| date = 2018-10-26 \| url = https://boerse.ard.de/boersenwissen/boersengeschichte-n/der-tag-als-die-vw-aktie-1000-euro-kostete100.html \| location = Frankfurt \| access-date = 2018-10-26 \| archive-date = 2018-10-26 \| archive-url = https://web.archive.org/web/20181026222745/https://boerse.ard.de/boersenwissen/boersengeschichte-n/der-tag-als-die-vw-aktie-1000-euro-kostete100.html \| url-status = dead }}</ref>		One of the wealthiest men in Germany's industry, [[Adolf Merckle]], died by suicide after shorting Volkswagen shares.<ref>{{cite news \| title = Adolf Merckle, German tycoon who lost millions on VW shares, commits suicide \| newspaper = [[The Sunday Times]] \| date = 2009-01-07 \| url = http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5460281.ece \| location = London \| first = Roger \| last = Boyes \| access-date = 2010-10-31 \| archive-date = 2011-06-12 \| archive-url = https://web.archive.org/web/20110612030743/http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5460281.ece \| url-status = dead }}</ref><ref>{{Cite news \| title = Der Tag, als die VW-Aktie 1.000 Euro kostete \| publisher = [[Tagesschau (German TV series)]] \| date = 2018-10-26 \| url = https://boerse.ard.de/boersenwissen/boersengeschichte-n/der-tag-als-die-vw-aktie-1000-euro-kostete100.html \| location = Frankfurt \| access-date = 2018-10-26 \| archive-date = 2018-10-26 \| archive-url = https://web.archive.org/web/20181026222745/https://boerse.ard.de/boersenwissen/boersengeschichte-n/der-tag-als-die-vw-aktie-1000-euro-kostete100.html \| url-status = dead }}</ref>

	===2010: Armajaro and the European cocoa market===		===2010: Armajaro and the European cocoa market===
	On July 17, 2010, [[Armajaro]] purchased 240,100 tonnes of [[cocoa bean\|cocoa]], the largest single cocoa trade in 14 years.<ref>{{cite news\|last=Farchy\|first=Jack\|title=Hedge fund develops taste for chocolate assets\|url=~~http~~://www.ft.com/~~cms/s/0~~/e50feefc-9120-11df-b297-00144feab49a~~.html~~\|access-date=27 July 2010\|newspaper=[[Financial Times]]\|date=16 July 2010\|archive-date=22 July 2010\|archive-url=https://web.archive.org/web/20100722094851/http://www.ft.com/cms/s/0/e50feefc-9120-11df-b297-00144feab49a.html\|url-status=live}}</ref>		On July 17, 2010, [[Armajaro]] purchased 240,100 tonnes of [[cocoa bean\|cocoa]], the largest single cocoa trade in 14 years.<ref>{{cite news\|last=Farchy\|first=Jack\|title=Hedge fund develops taste for chocolate assets\|url=https://www.ft.com/content/e50feefc-9120-11df-b297-00144feab49a\|access-date=27 July 2010\|newspaper=[[Financial Times]]\|date=16 July 2010\|archive-date=22 July 2010\|archive-url=https://web.archive.org/web/20100722094851/http://www.ft.com/cms/s/0/e50feefc-9120-11df-b297-00144feab49a.html\|url-status=live}}</ref>
	The buyout caused cocoa prices to rise to their highest level since 1977.		The buyout caused cocoa prices to rise to their highest level since 1977.
	The purchase was valued at £658 million and accounted for 7 percent of annual global cocoa production.<ref>{{cite news\|last1=Sibun\|first1=Jonathan\|last2=Wallop\|first2=Harry\|title=Mystery trader buys all Europe's cocoa\|url=https://www.telegraph.co.uk/finance/markets/7895242/Mystery-trader-buys-all-Europes-cocoa.html\|access-date=27 July 2010\|newspaper=The Telegraph\|date=17 July 2010\|archive-date=20 July 2010\|archive-url=https://web.archive.org/web/20100720192713/http://www.telegraph.co.uk/finance/markets/7895242/Mystery-trader-buys-all-Europes-cocoa.html\|url-status=live}}</ref>		The purchase was valued at £658 million and accounted for 7 percent of annual global cocoa production.<ref>{{cite news\|last1=Sibun\|first1=Jonathan\|last2=Wallop\|first2=Harry\|title=Mystery trader buys all Europe's cocoa\|url=https://www.telegraph.co.uk/finance/markets/7895242/Mystery-trader-buys-all-Europes-cocoa.html\|access-date=27 July 2010\|newspaper=The Telegraph\|date=17 July 2010\|archive-date=20 July 2010\|archive-url=https://web.archive.org/web/20100720192713/http://www.telegraph.co.uk/finance/markets/7895242/Mystery-trader-buys-all-Europes-cocoa.html\|url-status=live}}</ref>

	Anthony Ward, co-founder and manager of Armajaro, was dubbed "Chocfinger" by fellow traders for his exploits. The nickname is a reference to both the Bond villain [[Auric Goldfinger\|Goldfinger]] and a [[Cadbury Fingers\|British confection]].<ref name="nytimes2">{{cite news\|last1=Werdigier\|first1=Julia\|last2=Creswell\|first2=Julie\|title=Trader's Cocoa Binge Wraps Up Chocolate Market\|url=https://www.nytimes.com/2010/07/25/business/global/25chocolate.html?_r=2\|access-date=July 27, 2010\|newspaper=The New York Times\|date=July 24, 2010\|archive-date=August 6, 2012\|archive-url=https://web.archive.org/web/20120806094611/http://www.nytimes.com/2010/07/25/business/global/25chocolate.html?_r=2\|url-status=live}}</ref>		Anthony Ward, co-founder and manager of Armajaro, was dubbed "Chocfinger" by fellow traders for his exploits. The nickname is a reference to both the Bond villain [[Auric Goldfinger\|Goldfinger]] and a [[Cadbury Fingers\|British confection]].<ref name="nytimes2">{{cite news\|last1=Werdigier\|first1=Julia\|last2=Creswell\|first2=Julie\|title=Trader's Cocoa Binge Wraps Up Chocolate Market\|url=https://www.nytimes.com/2010/07/25/business/global/25chocolate.html?_r=2\|access-date=July 27, 2010\|newspaper=The New York Times\|date=July 24, 2010\|archive-date=August 6, 2012\|archive-url=https://web.archive.org/web/20120806094611/http://www.nytimes.com/2010/07/25/business/global/25chocolate.html?_r=2\|url-status=live}}</ref>

			==See also==
			* [[Barriers to entry]]
			* [[Bottleneck (production)]]
			* [[Essential facilities doctrine]]
			* [[Raising rivals' costs]]
			* [[Supply chain]]

	== References ==		== References ==

imported>Chrishlondonuk: /* 2008: Porsche and shares in Volkswagen */Changed to died by suicide, as suicide is not a criminal act

2025-06-14T00:56:11Z

2008: Porsche and shares in Volkswagen: Changed to died by suicide, as suicide is not a criminal act

← Previous revision		Revision as of 00:56, 14 June 2025
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	[https://www.telegraph.co.uk/finance/globalbusiness/3362913/Porsche-crashes-into-controversy-in-the-ultimate-short-squeeze.html "Porsche crashes into controversy in the ultimate 'short squeeze'"] {{Webarchive\|url=https://web.archive.org/web/20210227050139/https://www.telegraph.co.uk/finance/globalbusiness/3362913/Porsche-crashes-into-controversy-in-the-ultimate-short-squeeze.html \|date=2021-02-27 }}, [[The Daily Telegraph]]</ref> It was ultimately unsuccessful, leading to the resignation of Porsche's chief executive and financial director and to the merger of Porsche into Volkswagen.<ref>{{Cite news \| title = VW prepares to take over Porsche \| publisher = [[BBC]] \| date = 2009-07-23 \| url = http://news.bbc.co.uk/1/hi/business/8165524.stm \| access-date = 2010-07-05 \| archive-date = 2023-08-11 \| archive-url = https://web.archive.org/web/20230811215815/http://news.bbc.co.uk/2/hi/business/8165524.stm \| url-status = live }}</ref>		[https://www.telegraph.co.uk/finance/globalbusiness/3362913/Porsche-crashes-into-controversy-in-the-ultimate-short-squeeze.html "Porsche crashes into controversy in the ultimate 'short squeeze'"] {{Webarchive\|url=https://web.archive.org/web/20210227050139/https://www.telegraph.co.uk/finance/globalbusiness/3362913/Porsche-crashes-into-controversy-in-the-ultimate-short-squeeze.html \|date=2021-02-27 }}, [[The Daily Telegraph]]</ref> It was ultimately unsuccessful, leading to the resignation of Porsche's chief executive and financial director and to the merger of Porsche into Volkswagen.<ref>{{Cite news \| title = VW prepares to take over Porsche \| publisher = [[BBC]] \| date = 2009-07-23 \| url = http://news.bbc.co.uk/1/hi/business/8165524.stm \| access-date = 2010-07-05 \| archive-date = 2023-08-11 \| archive-url = https://web.archive.org/web/20230811215815/http://news.bbc.co.uk/2/hi/business/8165524.stm \| url-status = live }}</ref>

	One of the wealthiest men in Germany's industry, [[Adolf Merckle]], ~~committed~~ suicide after shorting Volkswagen shares.<ref>{{cite news \| title = Adolf Merckle, German tycoon who lost millions on VW shares, commits suicide \| newspaper = [[The Sunday Times]] \| date = 2009-01-07 \| url = http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5460281.ece \| location = London \| first = Roger \| last = Boyes \| access-date = 2010-10-31 \| archive-date = 2011-06-12 \| archive-url = https://web.archive.org/web/20110612030743/http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5460281.ece \| url-status = dead }}</ref><ref>{{Cite news \| title = Der Tag, als die VW-Aktie 1.000 Euro kostete \| publisher = [[Tagesschau (German TV series)]] \| date = 2018-10-26 \| url = https://boerse.ard.de/boersenwissen/boersengeschichte-n/der-tag-als-die-vw-aktie-1000-euro-kostete100.html \| location = Frankfurt \| access-date = 2018-10-26 \| archive-date = 2018-10-26 \| archive-url = https://web.archive.org/web/20181026222745/https://boerse.ard.de/boersenwissen/boersengeschichte-n/der-tag-als-die-vw-aktie-1000-euro-kostete100.html \| url-status = dead }}</ref>		One of the wealthiest men in Germany's industry, [[Adolf Merckle]], died by suicide after shorting Volkswagen shares.<ref>{{cite news \| title = Adolf Merckle, German tycoon who lost millions on VW shares, commits suicide \| newspaper = [[The Sunday Times]] \| date = 2009-01-07 \| url = http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5460281.ece \| location = London \| first = Roger \| last = Boyes \| access-date = 2010-10-31 \| archive-date = 2011-06-12 \| archive-url = https://web.archive.org/web/20110612030743/http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5460281.ece \| url-status = dead }}</ref><ref>{{Cite news \| title = Der Tag, als die VW-Aktie 1.000 Euro kostete \| publisher = [[Tagesschau (German TV series)]] \| date = 2018-10-26 \| url = https://boerse.ard.de/boersenwissen/boersengeschichte-n/der-tag-als-die-vw-aktie-1000-euro-kostete100.html \| location = Frankfurt \| access-date = 2018-10-26 \| archive-date = 2018-10-26 \| archive-url = https://web.archive.org/web/20181026222745/https://boerse.ard.de/boersenwissen/boersengeschichte-n/der-tag-als-die-vw-aktie-1000-euro-kostete100.html \| url-status = dead }}</ref>

	===2010: Armajaro and the European cocoa market===		===2010: Armajaro and the European cocoa market===

imported>Ultra 348 at 12:09, 13 April 2025

2025-04-13T12:09:13Z

New page

{{Short description|Commerce phenomenon}}
[[File:Gold price in USD.png|thumb|Following an attempt at cornering the silver market by the Hunt brothers in 1980, gold and silver prices briefly spiked in an event referred to as [[Silver Thursday]].]]
In [[finance]], '''cornering the market''' consists of obtaining sufficient control of a particular [[stock]], [[commodity]], or other [[asset]] in an attempt to [[market manipulation|manipulate]] the market price.

Companies that have cornered their markets have usually done so in an attempt to gain greater leeway in their decisions; for example, they may desire to charge higher prices for their products without fears of losing too much business. The cornerer hopes to gain control of enough of the [[supply and demand|supply]] of the commodity to be able to set the price for it.

==Strategy and risks==
Cornering a market can be attempted through several mechanisms. The most direct strategy is to buy a large percentage of the available commodity offered for sale in some [[spot market]] and [[Hoarding (economics)|hoard]] it. With the advent of [[futures trading]], a cornerer may buy a large number of [[futures contract]]s on a commodity and then sell them at a profit after inflating the price.

Although there have been many attempts to corner markets by massive purchases in everything from [[tin]] to [[cattle]], to date very few of these attempts have ever succeeded; instead, most of these attempted corners have tended to break themselves spontaneously. Indeed, as long ago as 1923, [[Edwin Lefèvre]] wrote, "very few of the great corners were profitable to the engineers of them."<ref>Lefèvre, Edwin (1923), ''[[Reminiscences of a Stock Operator]]'', chapter 19.</ref>

A company attempting to corner a market is vulnerable due to the size of its [[Position (finance)|position]], which makes it highly susceptible to [[market risk]]. By its nature, cornering a market requires a company to purchase commodities or their derivatives at artificial prices; this effectively creates a situation where other investors attempt to profit off of these machinations through [[arbitrage]]. This has a chilling effect on the cornering attempt, since these investors usually take positions opposed to the cornerer. Furthermore, if the price starts to move against the cornerer, any attempt by the cornerer to sell would likely cause the price to drop substantially, subjecting the cornerer to catastrophic risk.

In nearly all cases, the company simply runs out of money and disbands before getting close to controlling prices. In the few cases where companies have purchased a dominant position in a market, governments and exchanges have intervened. Cornering a market is often considered unethical by the general public and has highly undesirable effects on the economy.<ref>{{Cite web | url=https://corporatefinanceinstitute.com/resources/knowledge/strategy/cornering-the-market/ | title=Cornering the Market - Definition, How It Works, Example | access-date=2020-03-29 | archive-date=2020-03-29 | archive-url=https://web.archive.org/web/20200329035710/https://corporatefinanceinstitute.com/resources/knowledge/strategy/cornering-the-market/ | url-status=live }}</ref>

==Historical examples==

=== Thales of Miletus (c. 6th century BC) ===
According to [[Aristotle]] in ''[[The Politics]]'' (Book I Section 1259a),<ref>{{cite book |author=Aristotle |author-link=Aristotle |translator=H. Rackham |title=Politics |url=https://www.perseus.tufts.edu/hopper/text?doc=Aristot.+Pol.+1.1259a&redirect=true |access-date=2011-01-11 |archive-date=2012-10-11 |archive-url=https://web.archive.org/web/20121011013449/http://www.perseus.tufts.edu/hopper/text?doc=Aristot.+Pol.+1.1259a&redirect=true |url-status=live }}</ref> [[Thales of Miletus]] once cornered the market in olive-oil presses:

<blockquote>Thales, so the story goes, because of his poverty was taunted with the uselessness of philosophy; but from his knowledge of astronomy he had observed while it was still winter that there was going to be a large crop of olives, so he raised a small sum of money and paid round deposits for the whole of the olive-presses in Miletus and Chios, which he hired at a low rent as nobody was running him up; and when the season arrived, there was a sudden demand for a number of presses at the same time, and by letting them out on what terms he liked he realized a large sum of money, so proving that it is easy for philosophers to be rich if they choose.</blockquote>

===19th century: Classic examples by Edwin Lefèvre===
Journalist [[Edwin Lefèvre]] lists several examples of corners from the mid-19th century. He distinguishes corners as the result of manipulations from corners as the result of competitive buying.

====James Fisk, Jay Gould and the Black Friday (1869)====
The 1869 [[Black Friday (1869)|Black Friday]] financial panic in the United States was caused by the efforts of [[Jay Gould]] and [[James Fisk (financier)|James Fisk]] to corner the gold market on the [[New York Gold Exchange]]. When the government gold hit the market, the premium plummeted within minutes and many investors were ruined. Fisk and Gould escaped significant financial harm.

====Lefèvre thoughts on corners of the old days====
In chapter 19 of his book, Edwin Lefèvre tries to summarize the rationale for the corners of the 19th century.
{{quote|A wise old broker told me that all the big operators of the 60s and 70s had one ambition, and that was to work a corner. In many cases this was the offspring of vanity; in others, of the desire for revenge. [...] It was more than the prospective money profit that prompted the engineers of corners to do their damnedest. It was the vanity complex asserting itself among cold-bloodest operators.}}

===20th century: The Northern Pacific Railway===
The corner of The [[Northern Pacific Railway]] on May 9, 1901, is a well documented case of competitive buying, resulting in a panic. The 2009 Annotated Edition of ''[[Reminiscences of a Stock Operator]]'' contains Lefèvre's original account in chapter 3 as well as modern annotations explaining the actual locations and personalities on the page margins.

=== 1900s: The United Copper Company ===
In October of 1907, a failed attempt by [[F. Augustus Heinze]] to corner [[The United Copper Company]] led to the [[panic of 1907]]. A 50% fall in the [[New York Stock Exchange]] of the previous year was directly related to the event.{{how?|date=December 2024}}

===1920s: The Stutz Motor Company===
Called "a forerunner of the Livermore and Cutten operations of a few years later" by historian [[Robert Sobel]],{{Citation needed|date=January 2011}} the March 1920 corner of The [[Stutz Motor Company]] is an example of a manipulated corner ruining everyone involved, especially its originator Allan Ryan.<ref>{{Cite magazine |url=http://www.newyorker.com/archive/1969/08/23/1969_08_23_074_TNY_CARDS_000296736 |title=The New Yorker: A Corner in Stutz, 23 August 1969 |magazine=The New Yorker |date=15 August 1969 |access-date=28 June 2014 |archive-date=17 July 2008 |archive-url=https://web.archive.org/web/20080717115104/http://www.newyorker.com/archive/1969/08/23/1969_08_23_074_TNY_CARDS_000296736 |url-status=live |last1=Brooks |first1=John }}</ref>

===1950s: The onion market===
In the late 1950s, [[United States]] [[onion]] [[farmer]]s alleged that Sam Seigel and [[Vincent Kosuga]], [[Chicago Mercantile Exchange]] traders, were attempting to corner the market on onions. Their complaints resulted in the passage of the [[Onion Futures Act]], which banned trading in onion futures in the United States and remains in effect {{As of|2024|lc=on}}.<ref>{{cite news|first=Keith|last=Romer|title=The Great Onion Corner And The Futures Market|url=https://www.npr.org/2015/10/22/450769853/the-great-onion-corner-and-the-futures-market|newspaper=[[NPR]]|date=22 October 2015|access-date=22 October 2015|archive-date=23 October 2015|archive-url=https://web.archive.org/web/20151023052734/http://www.npr.org/2015/10/22/450769853/the-great-onion-corner-and-the-futures-market|url-status=live}}</ref>

===1970s: The Hunt brothers and the silver market===
Brothers [[Nelson Bunker Hunt]] and [[William Herbert Hunt]] attempted to corner the world [[silver]] markets in the late 1970s and early 1980s, at one stage holding the rights to more than half of the world's deliverable silver.<REF NAME="TEXAS">{{Cite magazine
| last = Gwynne
| first = S. C.
| title = Bunker Hunt
| magazine = [[Texas Monthly]]
| volume = 29
| issue = 9
| page = 78
| publisher = Emmis Communications Corporation
| location = Austin, Texas, United States
| date = September 2001
}}</ref> During the Hunts' accumulation of the precious metal, silver prices rose from $11 an ounce in September 1979 to nearly $50 an ounce in January 1980.<REF NAME="NYT">
{{cite news
| last = Eichenwald
| first = Kurt
| title = 2 Hunts Fined And Banned From Trades
| work = [[The New York Times]]
| date = 1989-12-21
| url = https://www.nytimes.com/1989/12/21/business/2-hunts-fined-and-banned-from-trades.html
| access-date = 2008-06-29
| archive-date = 2009-12-15
| archive-url = https://web.archive.org/web/20091215024743/http://www.nytimes.com/1989/12/21/business/2-hunts-fined-and-banned-from-trades.html
| url-status = live
}}
</ref> Silver prices ultimately collapsed to below $11 an ounce two months later,<REF NAME="NYT" /> much of the fall occurring on a single day now known as [[Silver Thursday]], due to changes made to exchange rules regarding the purchase of commodities on margin.<REF NAME="TimeBubble">{{Cite magazine
| title = Bunker's Busted Silver Bubble
| magazine = [[Time (magazine)|Time]]
| date = 1980-05-12
| access-date = 2008-06-29
| url = http://www.time.com/time/magazine/article/0,9171,920875-2,00.html
| archive-url = https://web.archive.org/web/20081002194346/http://www.time.com/time/magazine/article/0,9171,920875-2,00.html
| url-status = dead
| archive-date = October 2, 2008
}}</ref>

===1990s: Hamanaka and the copper market===
{{Detail|Sumitomo copper affair}}
[[Rogue trader]] [[Yasuo Hamanaka]], [[Sumitomo Corporation]]'s chief copper trader, attempted to corner the international copper market over a ten-year period leading up to 1996.<ref name="CopperTheAge">{{Cite news
| last = Gettler
| first = Leon
| title = Wake-up calls on rogue traders keep ringing, but who's answering the phone?
| newspaper = The Age
| date = 2008-02-02
| access-date = 2008-06-29
| url = http://business.theage.com.au/wakeup-calls-on-rogue-traders-keep-ringing-but-whos-answering-the-phone-20080201-1plq.html
| location = Melbourne
| archive-date = 2008-07-02
| archive-url = https://web.archive.org/web/20080702024911/http://business.theage.com.au/wakeup-calls-on-rogue-traders-keep-ringing-but-whos-answering-the-phone-20080201-1plq.html
| url-status = dead
}}</ref> As his scheme collapsed, Sumitomo was left with large positions in the copper market, ultimately losing US$2.6 billion.<ref name="CopperNYT">{{Cite news
| last = Petersen
| first = Melody
| title = Merrill Charged With 2d Firm In Copper Case
| newspaper = New York Times
| date = 1999-05-21
| access-date = 2008-06-29
| url = https://www.nytimes.com/1999/05/21/business/merrill-charged-with-2d-firm-in-copper-case.html?pagewanted=all
| archive-date = 2018-07-29
| archive-url = https://web.archive.org/web/20180729052038/https://www.nytimes.com/1999/05/21/business/merrill-charged-with-2d-firm-in-copper-case.html?pagewanted=all
| url-status = live
}}</ref> Hamanaka confessed in June 1996, and pleaded guilty to criminal charges stemming from his trading activity in 1997. A Tokyo court sentenced him to eight years in prison.<ref name="CopperNYT" /><ref>{{cite book | last = Jacque | first = Laurent L. | title = Global Derivative Debacles: From Theory to Malpractice | place = Singapore | publisher = World Scientific | year = 2010 | isbn = 978-981-283-770-7}} Chapter 7: Sumitomo, pp. 97–101.</ref>

===2008: Porsche and shares in Volkswagen===
During the [[2008 financial crisis]], [[Porsche]] cornered the market in shares of [[Volkswagen]], which briefly saw Volkswagen become the world's most valuable company.<ref>{{Cite news | title = Hedge funds make £18bn loss on VW | publisher = [[BBC]] | date = 2008-10-29 | url = http://news.bbc.co.uk/1/hi/business/7697082.stm | access-date = 2010-07-05 | archive-date = 2009-01-25 | archive-url = https://web.archive.org/web/20090125144950/http://news.bbc.co.uk/1/hi/business/7697082.stm | url-status = live }}</ref> Porsche claimed that its actions were intended to gain control of Volkswagen rather than to manipulate the market: in this case, while cornering the market in Volkswagen shares, Porsche contracted with [[naked shorts]]—resulting in a [[short squeeze]] on them.<ref>{{Cite news | title = Squeezy money | newspaper = Economist | date = 2008-10-30 | access-date = 2008-11-01 | url = http://www.economist.com/finance/displaystory.cfm?story_id=12523898 | archive-date = 2008-11-03 | archive-url = https://web.archive.org/web/20081103083148/http://www.economist.com/finance/displaystory.cfm?story_id=12523898 | url-status = live }};
[https://www.nytimes.com/2008/10/31/business/worldbusiness/31norris.html "A Clever Move by Porsche on VW’s Stock"] {{Webarchive|url=https://web.archive.org/web/20170411193627/http://www.nytimes.com/2008/10/31/business/worldbusiness/31norris.html |date=2017-04-11 }}, [[The New York Times]];
[https://www.telegraph.co.uk/finance/globalbusiness/3362913/Porsche-crashes-into-controversy-in-the-ultimate-short-squeeze.html "Porsche crashes into controversy in the ultimate 'short squeeze'"] {{Webarchive|url=https://web.archive.org/web/20210227050139/https://www.telegraph.co.uk/finance/globalbusiness/3362913/Porsche-crashes-into-controversy-in-the-ultimate-short-squeeze.html |date=2021-02-27 }}, [[The Daily Telegraph]]</ref> It was ultimately unsuccessful, leading to the resignation of Porsche's chief executive and financial director and to the merger of Porsche into Volkswagen.<ref>{{Cite news | title = VW prepares to take over Porsche | publisher = [[BBC]] | date = 2009-07-23 | url = http://news.bbc.co.uk/1/hi/business/8165524.stm | access-date = 2010-07-05 | archive-date = 2023-08-11 | archive-url = https://web.archive.org/web/20230811215815/http://news.bbc.co.uk/2/hi/business/8165524.stm | url-status = live }}</ref>

One of the wealthiest men in Germany's industry, [[Adolf Merckle]], committed suicide after shorting Volkswagen shares.<ref>{{cite news | title = Adolf Merckle, German tycoon who lost millions on VW shares, commits suicide | newspaper = [[The Sunday Times]] | date = 2009-01-07 | url = http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5460281.ece | location = London | first = Roger | last = Boyes | access-date = 2010-10-31 | archive-date = 2011-06-12 | archive-url = https://web.archive.org/web/20110612030743/http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5460281.ece | url-status = dead }}</ref><ref>{{Cite news | title = Der Tag, als die VW-Aktie 1.000 Euro kostete | publisher = [[Tagesschau (German TV series)]] | date = 2018-10-26 | url = https://boerse.ard.de/boersenwissen/boersengeschichte-n/der-tag-als-die-vw-aktie-1000-euro-kostete100.html | location = Frankfurt | access-date = 2018-10-26 | archive-date = 2018-10-26 | archive-url = https://web.archive.org/web/20181026222745/https://boerse.ard.de/boersenwissen/boersengeschichte-n/der-tag-als-die-vw-aktie-1000-euro-kostete100.html | url-status = dead }}</ref>

===2010: Armajaro and the European cocoa market===
On July 17, 2010, [[Armajaro]] purchased 240,100 tonnes of [[cocoa bean|cocoa]], the largest single cocoa trade in 14 years.<ref>{{cite news|last=Farchy|first=Jack|title=Hedge fund develops taste for chocolate assets|url=http://www.ft.com/cms/s/0/e50feefc-9120-11df-b297-00144feab49a.html|access-date=27 July 2010|newspaper=[[Financial Times]]|date=16 July 2010|archive-date=22 July 2010|archive-url=https://web.archive.org/web/20100722094851/http://www.ft.com/cms/s/0/e50feefc-9120-11df-b297-00144feab49a.html|url-status=live}}</ref>
The buyout caused cocoa prices to rise to their highest level since 1977.
The purchase was valued at £658 million and accounted for 7 percent of annual global cocoa production.<ref>{{cite news|last1=Sibun|first1=Jonathan|last2=Wallop|first2=Harry|title=Mystery trader buys all Europe's cocoa|url=https://www.telegraph.co.uk/finance/markets/7895242/Mystery-trader-buys-all-Europes-cocoa.html|access-date=27 July 2010|newspaper=The Telegraph|date=17 July 2010|archive-date=20 July 2010|archive-url=https://web.archive.org/web/20100720192713/http://www.telegraph.co.uk/finance/markets/7895242/Mystery-trader-buys-all-Europes-cocoa.html|url-status=live}}</ref>

Anthony Ward, co-founder and manager of Armajaro, was dubbed "Chocfinger" by fellow traders for his exploits. The nickname is a reference to both the Bond villain [[Auric Goldfinger|Goldfinger]] and a [[Cadbury Fingers|British confection]].<ref name="nytimes2">{{cite news|last1=Werdigier|first1=Julia|last2=Creswell|first2=Julie|title=Trader's Cocoa Binge Wraps Up Chocolate Market|url=https://www.nytimes.com/2010/07/25/business/global/25chocolate.html?_r=2|access-date=July 27, 2010|newspaper=The New York Times|date=July 24, 2010|archive-date=August 6, 2012|archive-url=https://web.archive.org/web/20120806094611/http://www.nytimes.com/2010/07/25/business/global/25chocolate.html?_r=2|url-status=live}}</ref>

== References ==
{{reflist|2}}

{{DEFAULTSORT:Cornering The Market}}
[[Category:Business terms]]
[[Category:Commodity markets]]
[[Category:Consumer protection]]
[[Category:Financial markets]]
[[Category:Market failure]]
[[Category:Market structure]]
[[Category:Metallism]]
[[Category:Scarcity]]
[[Category:Securities (finance)]]
[[Category:Anti-competitive practices]]