Unformatted text preview: The notorious case of the Hunt brothers’ silver corner (1979/80) involved the Hunt brothers holding (i) dominant long positions (probably 60% or more of the open interest) in futures contracts for silver and (ii) large stocks of silver bullion and coin. (a) Explain why the Hunts’ strategy could be regarded as conspiratorial. How would they have beneﬁted from it? (b) Using this example, what would you understand to be the main features, in general, of ‘cornering the market’. (c) What evidence should be required to justify the allegation of cornering the market? (d) Are there any natural forces (i.e. over and above legal action and regulatory control) which tend to limit the signiﬁcance of market corners? *****...
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- Spring '12
- Economics, futures contracts, MARKET MANIPULATION, price risk, R. E. Bailey