Analysis Of Futures Corners Mechanism In Puer Tea Market

Corners are that the members or customers in the futures exchange take advantage of capital to control futures transaction position, or monopolize the spot commodity available for delivery, then drive up or drive down the futures price, in the end force the counterpart to violate or liquidate at an unfavorable price. Corners is the the most popular, representative manipulation event with the largest loss.Because puer tea has the time value of the longer the perfume better and collection investment characteristic, it has presented the similar features as futures commodity. From 2004, puer tea became popular spread the whole china immediately and the price of puer climb up quickly. The series of activities of cornering the commodity, acquiring tea factory, building the idea, and swigging up the price can all be explained in futures corners mechanism.The result of puer tea price surge is that more and more people come into the rank of puer tea collection, but also some people have to suffer the loss when puer price fluctuates. This paper will mainly analyzes the corners mechanism in puer tea market to find the deep reason for price fluctuation.This paper first introduces the concept for corners, and develops a rational expectations model of corners and show that they can arises as a result of rational behavior. Then we analyze the current situation of puer tea industry, and refine the futures feature of puer tea based on its collection investment attribute. The paper puts emphasis on the corners mechanism in puer tea market. Though the description of puer capital banker route, we show the corners activities within the market and push factors in the corners process. Then we elaborate the events in rational expectations model of corners. In the end we analyze two cases about puer tea corners.