It was 5:42 a.m. on March 8 in London when the nickel market broke. At that time of day, bleary-eyed traders are typically just glancing at prices as they swig coffee on their way to the office.
On this day, however, metal traders across the city were glued to a screen, watching the price action on the electronic market, which was already open to accommodate Asian trading. Nickel prices usually move a few hundred dollars per ton in a day. For most of the past decade, they’d traded between US$10,000 and US$20,000.
Yet the day before, the market had started to unravel, with prices rising by a stunning 66 per cent to US$48,078. Now, the traders watched with a mixture of horror and grim fascination as the price went vertical. Already at an all-time high by 5:42 a.m., it lurched higher in stomach-churning leaps, soaring US$30,000 in a matter of minutes. Just after 6 a.m., the price of nickel passed US$100,000 a ton.
For participants in commodities exchanges, a price rally is not necessarily good news. Miners, traders, and manufacturers often use the market to make short bets—that is, to make money when prices fall.
For the rest of this article: https://www.bnnbloomberg.ca/the-18-minutes-of-trading-chaos-that-broke-the-nickel-market-1.1737377