CocoafingerOctober 3, 2010 Tim WorstallFinance5 CommentsEh? You mean he was short all along? previousYes WillnextTimmy elsewhere 5 thoughts on “Cocoafinger” Kay Tie October 3, 2010 at 10:56 am It’s a rare Sunday morning I get to read about backwardation and contango: usually I only ever see these terms when used by gold jitter bugs (the moon landings being used to bury the US gold reserves in the Sea of Tranquility, or something). Robert Edwards October 3, 2010 at 11:35 am As an ex- Cocoa trader, (Gill & Duffus) I can’t say I’m surprised by any of this. In my day, there was no developed options market; instead we relied upon selling futures contracts against about a third of the cash book, which in turn was largely demand-driven. But anyone who thinks that the Cocoa crop yield is weather-driven is talking crap. It’s not. But it has always been speculative, like Coffee, like Sugar, like Soya. It’s much easier to hedge now than it was in the 1970s. The oracle used to be the Gill & Duffus Cocoa report, which, iirc, came out around now. But they had people on the ground, all the time, in Ghana, Ivory Coast, Cameroon, etc. It was usually pretty accurate, actually, and the traders were always able to act on it before it was released. Tee Hee… Kay Tie October 3, 2010 at 1:57 pm “It was usually pretty accurate, actually, and the traders were always able to act on it before it was released. Tee Hee…” Wasn’t there some film with that plot? In the ’80s? Concentrated Frozen Orange Juice futures? Andrew Zalotocky October 3, 2010 at 3:10 pm Kay Tie: “Trading Places”, starring Dan Aykroyd and Eddie Murphy, 1983. Matthew October 3, 2010 at 8:34 pm Well on ICE in NY you can go short 140,000 contracts, if you’re the entire market, which he isn’t clearly. That’s 1.4 mt. Say same in London (I cant be bothered to check ). So it’s not impossible – but if you’ve been spun once, I’d be wary of assuming you aren’t being spun again. Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment Name * Email * Website Save my name, email, and website in this browser for the next time I comment.