Discussion in 'Commodity Futures' started by, Nov 14, 2005.

  1. IB is planning to offer copper futures, as def told me.

    I very much hope this will be sooon, because I'm expecting a major high within weeks.
    After that there should be profitable downside plays possible...
  2. I guess IB will need to find an exchange offering copper futures traded electronically

    unless IB is going to let its customers have access to "open outcry" trading on certain exchanges ?

  3. bolter


    I guess you didn't read the WSJ story today about the Chinese bank with a massive short position?
  4. Thanks for that. I've seen multiple reports of some funky shenanigans in the Copper market - acusations of a corner and what-not.

    Interesting, even if I will sit it out.
  5. Thanks also.
    I've just read a couple of articles. I'm convinced now a top is pretty imminent, but there won't be any major decline before end of december I suppose.

    I wonder why people STILL underestimate the chinese government. They start lying before they open even the mouth, but they always do it with a masterplan including all possible and impossible contingencies.

    I recommend reading "Sun Tzu" and "36 stratagems" (you probably know the first one, but he's not the only military mastermind in chinese history).

    By the way: China is one of the biggest producers of copper and is believed to have invested massively in mining infrastructure.
  6. I didn't read the WSJ article, but I heard about the position. Also heard that the trader who is responsible for the position is "missing". Did they fit him with cement shoes or did he just take off?
  7. bolter


    The bank denied this guy exists and said they don't have a book in copper, but LME traders said they've met the guy and have his business card. The article said his short position was the equiavlent of 3-4 times the total LME inventory. Even if this is half right clearly they can't deliver against it so they'll have to unwind their position. This is good news for those of us who are long. LME copper just put in an all-time high so the sky is the limit my friends.
  8. Price action for the last two days very much looks like somebody is unwinding a short position.
    So why do the Chinese deny this?
    Answer: They are irritating mainland Chinese buyers, to make them postpone their aquisitions in hope of better prices.
    The only perceivable circumstances under which a postponement of buys makes sense is that :
    - global production is believed to increase (certainly true, you don't have to find copper, you just dig it up)
    - the biggest buyer of all, Chinese electric infrastructure construction, has covered most of its needs for a while

    Does that make sense?
  9. The price action over the last 2 days does not look like somebody (SRB) unwinding a big short position, it's the market getting wind of somebody (they believe) has to unwind a big short position - if the SRB goes for a "get me out" type trade then I would expect copper will be 5-10% higher. The market knows of this potential short, has positioned and is waiting, if the buyer does not come then it'll drift off again but remain fairly well supported due to supply line problems which I believe will remain tight until back end 2006 at best. Short this market at your peril.

    Good luck.