Posted on 11/15/2005 9:05:19 PM PST by defenderSD
SHANGHAI (Reuters) - A copper trader for a secretive, high-level Chinese government agency has gone missing. But more than his whereabouts, traders are seeking clues as to how his employer -- and Beijing -- will handle the potential fallout.
Liu Qibing, a senior trader working for an entity of China's State Reserves Bureau, hasn't been heard from for a few weeks, since rumors surfaced of a large short position held by his employer in London copper markets.
The position, rumored to be between 150,000 and 200,000 tons, was taken as a bet that copper would fall -- just as the industrial metal continued to hit new peaks.
"We all really just want to go up there and pay them a visit, to find out what is really going on," said a Shanghai-based copper trader with a Hong Kong metals trading firm.
"Right now, if the copper market is like a highway, there's a student driver out there driving a tank, and everyone else just wants to get out of the way."
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(Excerpt) Read more at news.moneycentral.msn.com ...
If I were a Chinese copper trader in that situation, I'd get the eff out of Dodge reeeeeeeeeal fast;)
George Soros must be glad he lives in a country where he doesn't "disappear" when he does something against the national interest.
Then again maybe he thinks he's next...
Don't mean the perils of wreckless trading. What difference does it make if you are long or short but caught with large positions on the wrong side of the market? There is nothing wrong with short selling. If people didn't do it, you couldn't get your long trades filled.
"Never trade with money you can't afford to lose."
Looks like this poor guy broke that rule.
Exactly. We have to remember if someone else doesn't take the other side of our trade (short for example) there is really no market. We would all be buyers and no one would be willing to sell to us. I have a feeling that we won't hear from this guy again. People have been taken out for much, much less. He lost the Chinese a ton of money.
I don't know about commodities, but you can still get your long trades filled by market makers without any short selling on the other side. But where short selling really benefits the stock market in a huge way is when the market has already plunged a long way and buyers get scared. At that time, short sellers buying back borrowed shares are sometimes the ONLY buyers in the market for some stocks and they play a crucial role in stabilizing the stock market.
Your right but in the futures markets, it's zero sum. There is somebody directly opposite your position for every contract. If you are long, someone else is short and vice versa.
No worse then the perils of long trading....
Bingo!...gotta have 2 sides to trade..
In theory the futures market could be limit-up on the open forever, and if short, maximum theoretical loss is infinite.
If long - even 200,000 tons long - and limit-down on the open, maximum theoretical loss is 100%.
OTOH, maximum theoretical loss is "all you have" either way.
Maybe he should have tried cattle futures.
Yeah, I think it's a psychological barrier for a lot of traders. Being "short" is equated with "bad" or "un-patriotic" for some reason. To me it's just part of the normal ebb and flow (trends) in the markets.
Another reason China will fail.
"Never trade with money you can't afford to lose."<<<
Tell that to the big banks/funds that short sell gold and silver and are allowed to short more then exists...unlike the regulated little guy that must have stock or a commodity available to be able to short...Hence the big boys control the price pure and simple...try Bill Butler here for some reference> http://www.financialsense.com/metals/main.htm
Yup....the only time anyone likes a short is when he's covering and putting the breaks on a crash...
Maybe he should have tried cattle futures.<<
Only if he had Hillerys broker!
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