The Son of Finance of the Great Age

  Chapter 132 Entering the market and building a position

  On Wednesday, September 22, the November crude oil futures index gapped and opened lower. After some shocks, it fell all the way down and fell below the $18.00 mark.

   This is also in the market's expectation. After the risk of a short squeeze is gone, the short sellers began to exert their strength after retreating in October, smashing the defense line set by the bulls at $18.00 in one fell swoop.

   "Zhang Sheng, should we make a move?" Zhong Shi looked at the board and asked a little uncertainly. After watching the board for so long, he still doesn't understand the meaning behind the constantly changing numbers.

   "Zhong Sheng, do you really want to make a move? You know, if all positions are opened, we will lose millions of dollars every time the price of crude oil rises!" Zhang Jiaqiang said worriedly. Based on Zhongshi’s current funds, it is possible to establish a position of no more than 100,000 lots. The minimum price of WTI’s contract change is 0.01 US dollars, which is 1 million US dollars in cash.

   "Enter the market! Don't be afraid, anyway, I am responsible for the loss and profit, and you have no responsibility." Zhong Shi said confidently. He is a layman after all, and he doesn't know some rules of the trading team. If a trading team loses a huge amount of client's funds, the reputation of the entire team will be ruined after the incident spreads, and no client with large funds will find such a team in the future.

   "Alright then!" Zhang Jiaqiang replied with some helplessness. In the end, he still has to listen to his clients. Even if they end up in a huge loss, the client's idea is the highest order, which is also one of their professional ethics. "Everyone is on position, everyone is ready to open positions according to the account and authority assigned to them, listen carefully to the quotes from the quoter, and be ready to short WTI at any time..."

  For this operation, HSBC also prepared several accounts, which were allocated by Zhang Jiaqiang and placed in the hands of each trader one by one. And these accounts also have a maximum position limit, Zhang Jiaqiang has already taken into account the ability and reaction speed of each trader when allocating them.

  After hearing Zhang Jiaqiang's order, the traders in his team sat down in front of the computer one after another, staring at the constantly changing numbers on the board, thinking about the upcoming battle. What's more, facing the small keyboard, he began to move his wrists to warm up for the upcoming position opening.

   At this time, the difference between the various traders is distinguished. The experienced traders have already quickly typed out pre-paid orders at different prices on the keyboard, while some others are still ready to go.

Pre-buy orders are the buy and sell orders that have been placed in advance but have not yet been issued. This is a preventive measure in the face of drastic market fluctuations, because sudden rises and falls may be found in the futures market at any time. If you prepare well in advance, you may lose the opportunity in an instant.

"Today's goal is to take the buy orders from the short sellers when they follow the trend to close their positions, and to take their sell orders when the bulls counterattack. It should be noted that the number of lots we open a position does not necessarily need to be large, but We must be quick, and we must not let others discover our existence, understand?" Zhang Jiaqiang straightened his face and said seriously.

  It is simply impossible for a large amount of funds to rush into the market without attracting the attention of all parties. It's as if with Zhong Shi's current funds, it is simply impossible to establish a contract of 100,000 lots in one day. It is estimated that when he opens a position, the oil index contract may be lowered by several price points at once. At that time, all the short sellers in the market will scramble to change hands to close their positions. This is an excellent opportunity for them to change hands and reverse. A group of unsteady bulls may also close their positions, while another group of bulls may bite their teeth and persist. After this batch of funds has been built up, the original shorts who have changed their short positions are very likely to go long and attack Zhongshi's funds together with the original remaining longs. At that time, he is likely to be the biggest short in the market.

   "Quotator starts!" Seeing that everyone was almost ready, Zhang Jiaqiang glanced at Zhong Shi, saw Zhong Shi nodded, and shouted loudly.

In the process of buying and selling contracts, traders need to focus on the current month's contract, but crude oil futures are somewhat different. In addition to the current main contract, there are also quite active funds in December, which is determined by the design of crude oil futures contracts of.

  In later generations of crude oil futures contracts, the longest can reach nine years. Except for the transactions in every month of the first six years, the transactions in the other three years are concentrated in June and December. Because of this, U.S. crude oil contracts were also very active in transactions in June and December.

   "CONX, CONZ..." The quoter immediately reported the real-time price, and the discount between the main contract and the forward contract showed that the market is still optimistic about the long-term oil futures. CONX is the oil index code for November, and CONZ is the code for December. It's just that the difference between these two months is too close. Even if the market sentiment is very optimistic, there is still room for arbitrage in the short term.

   "At $18.00, open a new position, sweep out the short positions and open long positions at this price, and the speed must be fast." As soon as the quotation clerk announced the quotation, Zhang Jiaqiang immediately issued an order. As his voice sounded, crackling keyboards sounded one after another.

  The order quickly appeared on the disk. After more than ten seconds of matching, the order on the disk at the price of 18.00 was wiped out, and the oil price fell immediately, falling to the position of 17.99 US dollars in an instant.

   "Stop, remove all orders that have not been traded, and wait for the bulls to counterattack." The price changed slightly, and the voice of the quotation clerk immediately sounded, followed by Zhang Jiaqiang's voice, followed by another burst of crackling keyboard sounds.

  Zhang Jiaqiang’s strategy is to quietly absorb short orders in the gap between long and short. After all, $18.00 is an important psychological threshold, and both long and short are unwilling to give up easily.

  Most of the changes at the price of 18.00 US dollars are some follow suits, and the main funds have not yet appeared. Zhang Jiaqiang knew very well that above and below this price, there were defense lines set up by both long and short sides, which could not be touched easily. Otherwise, when a large amount of funds appears at these prices, both long and short sides can easily see that another fund has entered the market. At that time, both parties may take the opportunity to use their strength to move the oil fingers to their own advantage. direction.

  If Zhang Jiaqiang throws out big money rashly now and touches the defense line set up by the bulls, the bears will definitely use this to exert their strength and set the oil price at a lower price. But in this way, it is not so easy for Zhang Jiaqiang to build a position, and vice versa, the long-term force will change the market trend, and Zhang Jiaqiang may become the only long-term opponent when he follows the trend.

Both parties in the market obviously didn't understand what was going on, how the order at the $18.00 position was wiped out all of a sudden, but the bulls who reacted quickly reacted and listed 347 at the $17.98 position. Buying the order with one hand, all of a sudden, the newly formed short follow-up order was wiped out, and then the price of the oil index rushed to $17.99, and after a short pause, it rushed to $18.00 again.

   Returning to the oil index price chart at the price of 18.00, 241 contracts were placed at the buying price of 18.00, and 102 contracts were placed at the selling price. It seems that it will rush to another price soon. However, at this moment, 300 short contracts suddenly appeared in the market, and all the closed short positions and newly opened long positions were wiped out at once.

How is this going? Both the bulls and the bears are confused. The bulls are suspecting that the bears have lowered the price of defense, while the bears are suspecting that the bulls are constantly changing positions to lure the bears to attack.

  After a short stay, the bears were the first to be unable to hold back, and launched an attack first, throwing 1,500 empty orders at the position of 18.00. Most of these empty orders were newly opened, as the first batch of tentative funds to ask for directions.

  The traders on Zhongshi’s side reacted quickly, opening new positions one after another to close these short positions, but their price was strictly controlled at 18.00, so the tentative shorts were not willing to change hands at all. After a little resistance, the bulls let the price of the oil index fall.

   "18.00, 17.99, 17.98..." The price fell two points in a row, but the mysterious fund still did not appear. The bulls finally stopped observing and prepared to accept the empty order. At this time, Zhang Jiaqiang's team made a move. They were also waiting for this time. There was no transaction at the position of $18.00, and then a new position was opened at the position of $17.98. Under the circumstances, the empty orders in hand were changed hands.

The 1,500-lot empty order was sold at the above price for 314 lots, and only 805 lots were absorbed in Zhang Jiaqiang's hands. Pull back to 18.00 dollars, and there is a posture to continue to attack.

  The bulls understand that this is another short seller in the market quietly absorbing positions, and the amount of funds is not small. The short sellers also understood after seeing the huge number of empty hands, but what they didn't understand was, how could the short sellers want to take the short orders at such a low price? Could it be that they wanted to suppress the bulls on their own? ?

  Their confusion in thinking caught Zhang Jiaqiang's trap. Among the operation strategies formulated by his team, this kind of virtual operation is the best strategy to absorb positions.

However, the bulls quickly grasped the lack of tacit understanding between the shorts and continued to throw out large purchase orders. The price quickly broke through key price levels such as 18.10, 18.20, and 18.30. The market was caught off guard and retreated one after another. Finally, a strong line of defense was set up at the position of 18.40. At this time, Zhang Jiaqiang’s funds also appropriately joined the market, and finally set the highest oil price of the day at 18.45.

  With the addition of Zhongshi funds, the shorts pushed back the bulls to the position of 18.05 in one fell swoop. The trading volume also fell, and then the market was filled with small transactions of ten or twenty lots, completely reduced to a junk market.

   On this day, Zhang Jiaqiang's team established a total of 5,410 short positions, with an average price of $18.20, and consumed $8.115 million.

   Special thanks to book friends Molong Zhangui, lingcu, 19770425, rexjue, extreme temptation 11, james_xu for their monthly support! At the same time, thank you for the reward that made me think about it! Thank you for the fluffy bear that Shihuangtian sent~~The author decided to work hard for a few more chapters in the past two days at the end of the month. I hope everyone will work hard and vote for a few more monthly tickets to support~Thank you~

  (end of this chapter)