Influence of warehouse receipt reduction on futures
The reduction of futures warehouse receipts represents the cancellation of some warehouse receipts and can be used to buy new futures. Why do you want to cancel it? It is to provide a position to buy new futures. Whether bearish or bullish, as long as futures warehouse receipts decrease, there will be an upward trend. It is good news that the reduction of futures warehouse receipts means that there are more vacancies to fill new futures.
The reduction of futures warehouse receipts is a good thing. Whether it is falling or rising now, the reduction of futures warehouse receipts means that there may be a wave of rising in the future, and making money is just around the corner. However, futures trading is not only affected by warehouse receipts, but also by multiple reasons. If the impact caused by other reasons is too large and the causes of the impact are more violent, then it is likely to decline. Futures will continue to fall when they are bearish. If futures resist rising, they will stop rising and turn sharply, forming a downward trend.
The spot dealer delivers the goods that meet the delivery standard to the delivery warehouse of the exchange. After the delivery warehouse is qualified, it will issue a standard warehouse receipt to the holder, who will go through the registration formalities with the delivery department of the exchange. Only registered warehouse receipts can be delivered, and the total quantity is the inventory quantity announced by the exchange.
The registered warehouse receipt can also be cancelled, but at this time, the goods marked by the warehouse receipt may not have left the warehouse, and may still be in the delivery inventory.
When the contract is delivered in a certain month, some warehouse receipts will be cancelled for delivery, because some warehouse receipts will enter the spot market for each delivery.
But sometimes, in order to influence the price, the makers (or the main holders of warehouse receipts) who participate in futures trading will change the inventory quantity announced by the exchange by registering or canceling warehouse receipts.
For example, when the main force wants the price to rise, a large number of registered warehouse receipts are cancelled, which leads to the shortage of deliverable goods, which leads to traders' expectation of future prices, but in fact, deliverable goods have not decreased and are still stored in the warehouse.
When the main force wants the price to fall, they will re-register the warehouse receipt, which will lead to the increase of goods, which will lead to the fall of futures prices.