Corner A Market

Ever seen the movie Trading Places? The Duke Brothers attempt to purchase as many contracts of frozen orange juice futures as possible, a move that would manipulate and significantly drive up the price.

This process is known as cornering the market. The goal is to buy and own as much of one specific asset as possible. It doesn’t matter if it’s stocks, orange juice, or even pencils…all that matters is that you’d have a stockpile at a time that significant demand for the asset exists. As a result, you can charge whatever you want and the market will have to accept your price.

The Duke Brothers plot is similar to the efforts of Nelson and William Hunt, who tried to corner the silver market in 1980, only to fuel a massive downturn in silver prices and panic in the market after exchanges altered their policies on purchasing commodities on margin.

We’ve also seen attempts to corner car companies in the 1920s, the U.S. onion market in the 1950s, and the European cocoa market as recently as 2010.