Is it profitable or does more harm than good to cancel the warehouse receipt?
The cancellation of the increase in warehouse receipts may lead to an increase in prices, which is a positive. As we all know, the increase of warehouse receipts will suppress futures prices, while the decrease of natural warehouse receipts will promote futures prices. After the warehouse receipt is generally cancelled, investors don't know whether the cancelled warehouse receipt has been taken away by investors or still exists in the warehouse.
In most cases, industrial customers use the cancellation of warehouse receipts to change market expectations of prices. When the main force wants the price to rise, a large number of registered warehouse receipts are cancelled, which leads traders to expect the future price. 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.
In the market, when a contract is delivered, it is necessary to cancel the warehouse receipt and leave the warehouse. At this time, the goods corresponding to these warehouse receipts flow into the spot market. What investors need to know is that the main force mainly changes the inventory quantity announced by the exchange by registering and canceling warehouse receipts, thus achieving the purpose of manipulating the futures price trend.