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Senior Advisor

Hey Mike Or Scott

When working in the shop yesterday -- this is great time for some dumb thinking , SO with that said --  i think I read that there was --like 100,000 contracts of corn bought BEFORE the report , I know there is alot of variables - but just wondering --- How many millions did the trade lose on this report ?  To me that is why the market dumped -- MARGIN calls -- 

 

It might take sometime before they want to play again .

 

Thanks

 

Ken

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3 Replies
Senior Contributor

Re: Hey Mike Or Scott

Well, in order to have 100,000 contracts bought before the report there needed to be someone or somebody to sell them 100,000 contracts before the report.

 

A lot of times you will read in blogs that there were 20,000 new longs or 60,000 new shorts added to the market..that is technically impossible. While open interest is an interesting measure of 'new' business, there are no trades that do not have an equal and opposite position. There has to be the exact same number of shorts as longs. The key statistic is "who has the stronger hand?" and clearly that was the short. Why cover a good winner when I think it will go lower? That is how this whole thing cascaded lower. Until the shorts cover or we introduce new longs into the market to take the losers of the old longs' hands the market will continue lower and vice versa to the upside.

 

Yes, we had some margin call selling but the fact of the matter was that those stocks numbers absolutely killed the longs that were looking the other way hoping for a smaller acreage number.

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Senior Advisor

Re: Hey Mike Or Scott

Thanks Scott !!

 

This just reinforced -- in your post --  why I just do a forward  -- A Basis or HTA contract -- I don't know Jack about what you guy's do --- LOL

 

 

Have a good day

 

 

Ken

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Senior Contributor

Re: Hey Mike Or Scott

You probably know a lot more than you think you do....

 

I have been doingt his for 25 years and still am learning.

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