Update On Anthony Ward's Cocoa Corner

   Well it has been four trading days since news leaked about Anthony Ward's attempt to corner the cocoa market and so far things have not worked out well for the hedge fund manager. The price of cocoa has fallen for 4 consecutive days for a total decline of around 7%.  This adds up to a loss of over 40 million pounds for Mr. Ward and company. The reason given for the sharp decline is hedge funds liquidating their long positions and I imagine initiating short positions. As we have speculated earlier, Ward made a mistake letting the news of his large purchase leak out because it would encourage other hedge funds to target his position. This seems to be occurring right now and would account for the large decline in cocoa prices. Is Mr. Ward in trouble yet? It is difficult to say and depends on the leverage he is using for his speculation. Usually commodity speculators use quite a bit of leverage which often leads to their demise, but Mr. Ward is a real professional--he used to trade for the commodity trading firm Phibro and is an expert in the cocoa market. It will be interesting to see how this saga plays out.

Black Swan Insights


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