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Int. J. Financial Stud. 2019, 7(1), 10; https://doi.org/10.3390/ijfs7010010

The Role of Canceled Warrants in the LME Market

Commodity Research Center, Public Procurement Service, Daejeon 35208, Korea
Received: 7 January 2019 / Revised: 8 February 2019 / Accepted: 8 February 2019 / Published: 12 February 2019
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Abstract

This article visits the question of whether canceled warrants (CWs) have a positive effect on LME metal prices. To examine this question carefully, a regression model is applied. This paper finds a statistically significant positive link between CWs and LME metal prices, including aluminum, zinc, tin, and nickel. However, other metals such as copper and lead are not statistically significant. The second objective of the study is to identify the dynamic response of metal price returns for aluminum, zinc, tin, and nickel to an innovation in the CWs using VAR. It is found that the positive impact of the CWs on metal returns is transitory. View Full-Text
Keywords: LME spot price; canceled warrants; speculation; financialization LME spot price; canceled warrants; speculation; financialization
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Park, J. The Role of Canceled Warrants in the LME Market. Int. J. Financial Stud. 2019, 7, 10.

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