Cornering the market

Companies that have cornered their markets have usually done so in an attempt to gain greater leeway in their decisions; for example, they may desire to charge higher prices for their products without fears of losing too much business.

The most direct strategy is to buy a large percentage of the available commodity offered for sale in some spot market and hoard it.

By its nature, cornering a market requires a company to purchase commodities or their derivatives at artificial prices; this effectively creates a situation where other investors attempt to profit off of these machinations through arbitrage.

Cornering a market is often considered unethical by the general public and has highly undesirable effects on the economy.

[2] According to Aristotle in The Politics (Book I Section 1259a),[3] Thales of Miletus once cornered the market in olive-oil presses: Thales, so the story goes, because of his poverty was taunted with the uselessness of philosophy; but from his knowledge of astronomy he had observed while it was still winter that there was going to be a large crop of olives, so he raised a small sum of money and paid round deposits for the whole of the olive-presses in Miletus and Chios, which he hired at a low rent as nobody was running him up; and when the season arrived, there was a sudden demand for a number of presses at the same time, and by letting them out on what terms he liked he realized a large sum of money, so proving that it is easy for philosophers to be rich if they choose.Journalist Edwin Lefèvre lists several examples of corners from the mid-19th century.

It was the vanity complex asserting itself among cold-bloodest operators.The corner of The Northern Pacific Railway on May 9, 1901, is a well documented case of competitive buying, resulting in a panic.

In October of 1907, a failed attempt by F. Augustus Heinze to corner The United Copper Company led to the panic of 1907.

[9] As his scheme collapsed, Sumitomo was left with large positions in the copper market, ultimately losing US$2.6 billion.

[14] One of the wealthiest men in Germany's industry, Adolf Merckle, committed suicide after shorting Volkswagen shares.