The Son of Finance of the Great Age

  Chapter 189 If you don't die, you won't die

"You must play with these **** to death. You really don't take people like us seriously." Carl said angrily. He suddenly slapped the thick mahogany conference table, making a loud bang, and put The traders who were discussing were shocked and looked at Karl inexplicably.

   "We must do something..." Carl repeated these few words in his mouth, then stood up and walked back and forth frequently. When several traders saw that he had such a big reaction, they didn't know what to say for a while.

  The meeting room fell into silence for a while, only the sound of Carl's leather shoes hitting the floor as he walked back and forth. After a long time, Carl finally realized: "What's wrong with you? Why is no one talking?"

  A few traders, you looked at me, and I looked at you, not knowing what to say for a while. It was Jerry who was more courageous, and said, "Boss, since the main force means this, what should we do?"

"Short!" Carl shouted hoarsely, "of course it is short! Jerry, your analysis is not wrong, it is 100% correct. According to our analysis and judgment, once these long positions are liquidated , will immediately choose to close out the long position in November in the market, and then the price of copper futures will drop rapidly, we must not miss this opportunity, understand?"

   "Understood!" All the traders shouted in unison. But immediately someone asked: "But boss, what is the specific price, and what kind of position should we operate in?"

   These data are related to the timing of their entry and exit, so traders must ask clearly before they can operate in the market in a timely manner.

  Hearing this, Carl seemed to be poured cold water from the beginning to the end, and his feverish mind immediately calmed down. He was originally a proud person, and since he established a hedge fund, he has been at the forefront of the industry in terms of performance, which gave him a sense of vanity to control the overall situation without knowing it, and entered the copper futures market. This was even more so in the end. In just a few months, he earned five million dollars in excess income, which made him even more arrogant and flamboyant.

  Although he is impetuous, Carl has a superb grasp of disk analysis and the psychology of both long and short sides, which is why he can see the price changes in the copper market during this period. It’s just that he considers himself an important role, but today he found out that he and his fund survived other people’s strategies in the entire copper futures market, which made him feel extremely depressed and unhappy.

It’s okay to be unhappy. Now that he has seen the intentions of both sides, Karl will never let go of such an opportunity. After rolling his eyes a few times quickly, he made up his mind and said, “Since we want to be short, let’s do it. The second largest. The current price of copper is around 2,700 US dollars. I believe that the price changes in the next few trading days should be around this position. We can consider opening a short position at this position, which can also resist part of the risk. As for the future balance The price of the warehouse, my personal estimate is about 2,550 US dollars, which should be the normal copper futures price. As for the warehouse, 80% is a more appropriate figure."

  "Eighty percent?" The traders were a little surprised. They looked at each other and were a little dumbfounded. In the end, it was Jerry who expressed their doubts: "Boss, is this position too high?"

  Based on their current amount of funds, they can open up to 1,500 short positions, and this is still under the condition that they have cleared all the current positions. They have been gradually clearing their long positions, and the current cash ratio has reached 60%, and the remaining positions can all be cleared within one or two trading days.

  Even so, the risk of operating in one direction with 80% of the total amount is still too high, especially when the copper futures market has no ups and downs.

"Not much!" Carl was determined to go all out this time, and didn't take the traders' reactions seriously. "This time we will increase leverage and borrow funds from brokers. Jerry, with our credit line, the most we can borrow How much money?"

"Our credit limit is low, and the broker gave us two plans, one is 30 times leverage, that is, every time we open a position, the broker pays half of the funds. In this case, we can build up to 2,500 In addition, they will lend us five million dollars at one time, and the interest will be calculated according to the market benchmark interest rate." Jerry said calmly.

  Jerry is not only responsible for trading, but also dealing with brokers, so when Carl asks about the situation, he can answer it immediately.

Of these two schemes, it seems that the first one can borrow more funds, but the manipulation of this scheme is subject to the influence of the broker, that is, in the event of a loss, the broker has the right to require the fund to close the position and stop the loss . For example, it takes US$10,000 to open a short contract at a price of US$2,666, US$5,000 from the fund and US$5,000 from the broker. When the price fell to $2,600, the contract earned $1,650. In addition to the broker’s $5,000, the fund earned $1,650 with a principal of $5,000, a yield of 33%. And once the price of copper futures rises, for example, to 2710 US dollars, although the contract only loses 1100 US dollars, it has not yet reached the level of maintenance margin, but for the safety of its own funds, the broker is very likely to require the fund to call for margin or even the balance. Because this contract is currently only $8,900, which is already approaching the level of $8,130 (2710*25*0.12) required for a 12% maintenance margin.

  When the price rises to 2740 USD, the contract loses 1850 USD, which is only worth 8150 USD, and the maintenance margin reaches 8220 USD, the contract will be liquidated and will be forcibly liquidated before then. At that time, in addition to the broker's $5,000, the fund will only have a little over $3,000, and the loss will reach 40%.

  Increasing leverage can magnify returns, but at the same time risks are also magnified. Another option is to give a certain amount of funds at once, which is equivalent to a loan. Although the amount of this kind of financing is not large, compared with the first option, the flexibility of the fund operation is much stronger, and the degree of constraints Also a lot lighter.

Of course Karl understands the pros and cons of this financing method. Just when the traders were all inclined to the second option, he gritted his teeth suddenly and said fiercely: "We will increase leverage and borrow in the first way." Funding, it's going to be a big game."

   "This is not good, is it? The risk is too great!"

   “If the market doesn’t go the way we think it will, we could be screwed.”

  …

The traders quickly persuaded that this time is no longer the crazy 80s, when crazy playboys like Joel Belfort did everything they could to make money, and today's Wall Street financial practitioners pay more attention to using the chaotic financial order to make a fortune, but Only one constant is their crazy pursuit of money.

Obviously Carl is such a person, he dismissed the worries of many traders, after wiping his shiny hair, he said to the traders with pride: "Gentlemen, don't think about any risks. , You know we are facing an excellent opportunity now, understand? No more than ten people can see this opportunity in the market, understand? And even if we do the wrong direction, there is enough room to stop losses. Gentlemen , Who are we? We are hedge funds, the higher the leverage, the better the industry, the greater the returns, the better, we are not those **** investment banks, nor the **** public funds, we are the ones who beat the central bank.”

  Since Soros was interviewed, people in the industry and outside the industry have called him "the man who beat the Bank of England", and Carl, who regards Soros as an idol, often says this sentence on his lips. In fact, based on his performance in the past few years, even Soros is no more than that, but the size of his fund cannot be compared with those large hedge funds.

  More importantly, these funds are entrusted by customers to manage them. Even if there is a huge loss, these managers will not lose much, especially when their own funds are very small. At this time, Karl was already a little crazy, and he could no longer listen to other suggestions. The persuasion of the traders is also out of risk considerations. Like Carl, they are also arrogant people, and they are extremely confident in their own analysis and judgment. After careful discussion, they finally decided Execute Carl's decision.

  Establish a short position around $2,700, and the proportion of the position is about 80%. After the current copper price drops to $2,600, it will gradually close the position. This is the strategy formulated by Karl. After discussion, the traders finally decided to buy part of the December long options with the reserved funds for risk hedging.

  After contacting the broker, they finally calculated that the total number of short positions that can be opened is about 2,400 lots, leaving 3 million US dollars for margin.

  …

   On Zhongshi’s side, after successfully establishing a long bottom position, he is discussing secretly with Andrew, planning to increase the price of copper in the near future.

   "Andrew, we already have a long position of close to 30,000 lots. Now we can be regarded as the main force in the market. It's time to do something!" Zhong Shi said confidently.

  In Hilton's luxurious suite, there were only Andrew and Zhong Shi. Zhong Shi was wearing silk pajamas and was eating breakfast slowly, while Andrew, who had already been fully dressed, was sitting opposite the dining table, looking at Zhong Shi with a little helplessness.

  The hotel rooms are covered with scarlet carpets, from exotic Arabia, with unknown patterns painted on them. The furniture is all from Italy, and the fine teak wood is sprayed with bright paint, which makes people look very comfortable. In addition to these luxurious decorations, there was even a Steinway piano in the corner, but Andrew tried playing it a few times and found that the piano hadn't been tuned for a while.

  Andrew came to pick up Zhongshi. Zhongshi was not used to the habit of driving on the left in the UK, so Andrew naturally acted as the driver. It's just that he was worried when he came this day, and asked Zhong Shi about his specific strategy before he finished his breakfast.

   "Do something?" Andrew's eyes widened, his face full of doubts.

  Zhong Shi shook his head helplessly, drank the orange juice in the glass, wiped his mouth, and said in a tone of hating iron and steel: "What are you doing? Of course it is to manipulate the price of copper futures!"

   Thank you very much for the support of book friend Yu Hongchuan eddie!

  (end of this chapter)