The Son of Finance of the Great Age

  Chapter 488 Attack

Natural gas futures contracts are traded on both NYMEX and ICE exchanges, and the underlying amount is almost the same. The slight difference is that the New York Mercantile Exchange is a physical delivery, because in Louisiana there is a natural gas pipeline system all over the United States, and the intercontinental Exchanges do not support physical delivery.

A standard natural gas contract, whose unit is 10,000 mmBtu (million British thermal units), is quoted as US cents/million British thermal units, and the maximum daily price fluctuation in each month is 3 US dollars/million British thermal units, that is, 3 million dollars per contract. After breaking through the upper and lower limits of the price, the circuit breaker will restart the transaction for five minutes, and the upper and lower limits will be increased by $3 again. If the circuit breaker occurs again, this procedure will be repeated.

  Because of the hedging function, the natural gas contract year in NYMEX is very long, and there are contract transactions in every month from this year to the following 12 years. However, except for some natural gas manufacturers who trade in distant months, most of the other participants trade in the contracts of the current year and the next year, which are one of the month contracts with the largest trading volume and the best liquidity.

   But now, some of the supposedly liquid monthly contracts are broken because the market is massively held in one institution, which is the undead hedge fund position.

   "See the difference between the 0703 contract and the 0704 contract? $2.50, God, what an amazing figure, the price difference between one contract is $25,000!"

  In the trading hall, Hu Ping is delivering an exciting speech, the content of which is naturally aimed at the permanent position. Because of holding a larger and larger position, selling the April contract while buying the March contract makes the price divergence between the two more and more serious. Traders with a little common sense can realize this situation , and what Hu Ping has to do is to attack this situation.

"We now have about 20,000 positions of 03 and 04 on hand. Based on hedging considerations, the amount of positions held in each month is about the same. It is precisely because the opponents continue to widen the price difference that the former holders of these positions have been unable to maintain the current position. size, but they were lucky, and the opponents should be lucky, because these positions fell into our hands!"

  The traders were nervously preparing for the work before the market, while listening to Hu Ping's speech with their ears up. They had already sensed what their boss was going to do, and now it was time for Hu Ping to cheer them on.

"Damn, although there will be a price difference between the two months because of the quarter, it will never be so serious. Now all we need to do is sell the March contract as short as possible and buy the April contract contract, narrowing the price difference between the two to a reasonable range.”

  After encouraging people's hearts, Hu Ping gave the operation strategy. He knows how professional his team is, as long as he gives a general direction, the rest is the implementation.

  Because there has been no revolutionary breakthrough in mining technology, so far, the price of natural gas futures has remained at around $6 to $9, and even reached $15.77 at its peak. Later, due to the discovery of more and more reserves of natural gas and the rapid innovation of mining technology, the supply and demand relationship of natural gas has undergone fundamental changes. The price of futures has been cut in half, and even dropped to $1.90 at one point. The risks and benefits brought about by market fluctuations have also been reduced, so that the current booming natural gas market has shrunk a lot later, and many funds have chosen to withdraw.

   But now, the opportunity is in front of us.

"7.93, 0703 contract, sell 100 lots, 5.43, 0704 contract, follow up to buy, first test the reaction of the market!" After carefully studying the market situation, Hu Ping decisively gave a price to test first .

  Since the Evergreen Fund is doing shoulder arbitrage, if you want to defeat the opponent, you must reduce their arbitrage space as small as possible. And this kind of reduction is based on suppressing the 0703 contract and raising the 0704 contract as a condition, that is, it can only be realized if the contracts of two months are started together, and a single short sale and bullishness of a certain month cannot achieve such an effect. Therefore, while selling, the other side must follow up and buy at the same time.

  After 100 lots of contracts at $7.93 entered the market at 0703, it quickly caused a commotion in a small area, because such pending orders were neither too big nor too small, and the key was that the market did not understand its intention. However, it was soon discovered that almost at the same time, a buy order of the same amount was placed in 0704, and the price difference between the two was exactly the price difference in the current market.

"Is this arbitrage?" This is the first reaction in many people's minds. However, because the direction is completely opposite to the current market trend, they quickly denied their ideas. Even more impossible, what can a mere 200-lot contract do?

Soon, the 200-lot contracts were submerged in the rolling trading column, and there was not even a wave of waves, because the number of lots was too small, but after the two-month contract fluctuated slightly by $0.15, the market Quickly return to the previous price difference again.

   "As expected!"

  After carefully looking at the changes in the K-line chart, Hu Ping crossed his arms and crossed his chest, and said without any emotional change. Then he snapped his fingers towards the sky, commanding the trader: "Continue with the strategy just now, follow up the market price, and do it four more times. Remember, don't close the position!"

  Although there are rumors outside that the Undead Flower Fund has accumulated a large number of positions in the past two months, no one knows the exact number. The most important thing is that if there is such a huge position, I believe that their floating profit has reached a very considerable figure so far. With these floating profits alone, the Evergreen Fund will be able to settle most of the market and fight against them funds.

  So even though Hu Ping currently has a huge amount of money in his hands, he doesn't dare to come out and fight against them easily. Because firstly, his capital is not comparable to that of the Evergreen Fund, and secondly, in the absence of any major positive market conditions, it is impossible to tell the winner only by the competition of funds.

   Soon for the second time in the second two months, 100 pending orders with different directions reappeared in the market, but this time it still did not attract the attention of the market. But for the third, fourth and fifth time, after these pending orders appeared one after another, institutions in the market gradually began to pay attention.

  If the position is not closed, the other party has accumulated a full 1,000 lots of positions this time, and the direction is exactly opposite to the current market development. This has to be said to be a strange phenomenon in the market today. For a position of 1,000 lots, the amount of margin has reached millions of dollars. What is certain is that the other party has at least tens of millions or even more funds to maintain this position, and is a big customer!

   And some traders think more, because they have heard that there are people who are rounding up the natural gas positions that will not fade. However, when this situation occurred in the market today, it depends on the follow-up trend of the market whether they blew the horn of attack, or simply issued a challenge to the Everbright Fund.

  In short, after five consecutive transactions of 1,000 contracts, various rumors in the market began to rise quietly, but these news were soon submerged in the ensuing revenge of the Evergreen Fund.

   "Who is this, who doesn't know how to live or die, and wants to fight against us!"

  In Calgary's office, Bond Hunter watched all this angrily, and finally couldn't help but let out a roar, which made everyone's hearts tremble with the roar like a wounded beast.

  Having been with Bond Hunter for a long time, these people have long been aware of his character and personality, full of confidence, extremely arrogant, and supercilious. Of course, Wall Street is full of people with this kind of aggressive character, but there are very few people who can really show it. After all, not everyone can achieve the performance like Bond Hunter.

   Now that Hunter is offended, the traders immediately think of what consequences the other party will suffer.

   "Raise the price of the March contract for me, suppress the price of April, and widen the price difference between the two. I want the market to see what will happen to those who deliberately oppose me!"

   After venting a bit, Hunter calmed down almost immediately. If an outsider saw this instantaneous role change, he would definitely be at a loss for a while. But the traders who knew Hunter well were used to this. They had long sat in front of the computer, waiting for Hunter to issue orders after calming down.

  After Hunter issued the trading order, the traders quickly began to clatter on the keyboard and start placing orders on the electronic disk. Not long after, a series of dozens of buy orders emerged on NYMEX's NG0703 contract, submerging the sell orders at this price within a few minutes, and the price of the 0703 contract rose by 0.5 dollars under the crazy buying market. And almost at the same time, a sell order with almost the same lot size was also placed on the 0704 contract market. What made people feel stunned was that although the price was hit to $5.03 not long after, the price difference between the two It expanded by 0.9 dollars, but the selling orders showed no tendency to close at all. Hundreds of selling orders were still placed around 5.00 dollars, and they even thought about breaking through the 5 dollars mark in one fell swoop.

All of this happened in just five minutes. The price difference of 0.9 US dollars means that the 1,000-lot position institution just now lost 9 million US dollars. Within a short period of time, the position was liquidated.

  The market is dumbfounded!

  However, at this time, the price difference between adjacent months was as high as $3.4, and many investors saw the possibility of profit. They all ended up in the opposite direction, and began to short sell March and buy April contracts. In the face of the influx of funds, the funds of the Everbright Fund, who just wanted to teach the other party a lesson, chose to retreat. While gaining part of the profits, they began to withdraw in an orderly manner. It took more than half an hour for hundreds of contracts. After the fight, the two sides returned to the same starting line again, and the price difference between the two months remained at around $2.5.

  Then the market began to trade tepidly, and the buying and selling orders of dozens or hundreds of hands never appeared again. However, traders who have experienced the scene just now know exactly what happened in the market just now.

   "It really is a powerful character!"

Hu Ping stroked his smooth chin, and sincerely praised him. He just tried a little bit just now, but he suffered such a fierce counterattack from the other party. If his follow-up funds were insufficient, the broker would have called to urge him to pay. Margin is up.

  But the more intense the other party's reaction, the more it shows a problem, that is, the other party has really bet heavily on these two months, and no one should be coveted about it. It is precisely based on this judgment that Hu Ping is more interested in having a good time with the other party!

  …

   "Have they leveled off yet?"

After finishing the transaction, Bond Hunter quickly packed up his belongings, and immediately walked towards the door, but when he reached the door, he stopped suddenly and pulled a trader past him , asked without thinking.

"Probably not!" The trader frowned, and blurted out without hesitation, "According to the open interest announced today, a total of 1,724 open contracts have been added in the past two months, an increase of 1,892 from the previous day. I think They shouldn't be flattened!"

   Bond Hunter's heart suddenly flashed a glimmer of haze.

   Thanks to book friends Niu Xiaofan, Xingxiyuelang, and 8112268536 for voting monthly!

  (end of this chapter)