The Son of Finance of the Great Age

  Chapter 490 Risk Emergence (Part 1)

   "Jiangshan, increase the position by another 15,000 lots. The direction and target are consistent with the previous ones. The month of 0609 and 0610 increased by 5,000 lots, the contracts of 0703 and 0704 increased by 10,000 lots, and the total number of lots increased to 45,000 lots."

On August 25th, after the contract trading in August ended, the main natural gas contracts were transferred to September and October. At this time, due to the diversion of funds in August, the liquidity of contracts in other distant months There has been an increase, so this is a good time to open a position. After clearing all the sporadic positions in August on hand, Hu Ping finally decided to launch an attack on the positions of the Everlasting Flower Fund.

  After thinking about it, Hu Ping added: "In addition, if you add 5,000 short positions in the options market, you must have a corresponding allocation for each of these four months."

  Jiang Shan is a member of Hu Ping's trading team, graduated from Yale University with a master's degree in finance, and is proficient in mathematical analysis and pricing calculation of derivatives. The young man still has pimples on his face that have not completely subsided. After hearing Hu Ping's words, his expression changed immediately, and he immediately retorted: "Boss, do you want to increase the short option position? Could it be that this part Isn’t the position hedging? If so, shouldn’t we combine long and short instead of blindly selling short?”

With the development of the natural gas market, the relevant option market has also developed rapidly. At present, in the NYMEX natural gas option market, no matter in terms of the underlying amount or the scale of the transaction, the natural gas option contracts in each month far exceed levels of natural gas futures trading. Of course, the main reason is that compared with the natural gas contracts, which cost tens of thousands of dollars a lot, the options contracts with only tens of dollars or even lower prices are extremely cheap.

  This is only NYMEX, and in ICE Intercontinental Exchange, this situation is even more exaggerated. Because it is a European-style option, there are clear regulations on pricing and execution date, so compared with American-style options, its transaction scale and underlying amount are even greater.

  For Hu Ping's current position, using options to hedge is undoubtedly a good hedging method. As long as he makes an arbitrage combination in the exact opposite direction, he can stop the loss to a certain extent. But what Jiang Shan didn't understand was that the operation Hu Ping requested was not what he imagined, but a naked addition of air and air, which made it difficult for him to understand.

   "No! Your thinking is completely wrong!"

Hu Ping waved his hand and said proudly: "What we are thinking about now is not how to avoid risks, but to make use of risks to make it bigger as much as possible, and to put all-round pressure on the Everlasting Flower Fund, so that it is possible to succeed if we go all out. If you are timid, and don't think about winning first, you think about how not to lose badly, then you will not be able to use your hands and feet."

  Hu Ping is such a person, he will not make up his mind easily, but once he has made up his mind, he will go on without hesitation. So his current strategy is aimed at the natural gas market after the collapse, all of which have to happen after he defeats the Evergreen Fund.

  Jiang Shan curled his lips and said nothing more.

  …

On August 28, the main funds and institutions officially transferred to the first trading day of the September contract, because there was a large liquidation at the end of August before, which made investors cautious about the transactions in this month attitude, the price of US$6.51 is a full US$0.64 less than the US$7.15 at the close of the previous trading day. Seeing this situation, both long and short parties concentrated in September began to re-evaluate the market trend, and then started fighting as usual.

   "6.50, September contract, sell 100 lots, operate in the opposite direction in October, buy, order at market price."

  In the trading room, after discussing with several core members of the team, Hu Ping quickly issued an entrustment order.

Due to the sudden drop in the near-month contract, the far-month contract also fell. Although there are fluctuations between different months, due to the particularity of portfolio arbitrage, the contract price difference between 0703 and 0704 Instead of rising, it fell, from the previous $2.5 to $2.25.

Under such circumstances, Hu Ping naturally hopes to achieve his goal by suppressing the price of the spot month contract more actively and raising the price of the far month contract. Now that an obvious opportunity is at the door, how could he not be firm? Hold on.

  Pending orders of 100 lots appeared in the market very quickly, because the bearish sentiment was extremely strong that day, so I hung up in the sell order column for a long time, but there was no transaction. After thinking for a while, Hu Ping resolutely withdrew the pending order and placed a new 100-lot contract at a price of $6.45.

  Compared to the daily trading volume of tens of thousands of contracts, this number of contracts is obviously nothing. But the problem is that the daily trading volume is crazily swiped out by several or dozens of hands, and the contract of hundreds of hands is already considered a relatively large amount in a single transaction, so when the 100-hand contract is listed, It immediately became the focus of the audience, and investors were guessing what the main funds were planning to do.

   It's just that before they guessed the reason, they decisively opened a new position with long positions, and directly accepted the sell order at a price of 6.45. As soon as the news of the double opening was announced in front of the computer screen, many people immediately realized that in terms of the direction of the market, there were differences among institutions with relatively large capital, at least in their opinion.

  Then several or dozens of contracts began to frantically swipe the screen, and it was difficult to see the pending orders of hundreds of contracts. As the transaction continued, the price of the natural gas contract gradually fell, and quickly approached the 6.40 mark.

  As the near-month contracts continue to fall, the corresponding far-month contracts also fall, and the price difference between the two is further narrowed. Although this narrowing is very small, compared with the huge position of the Everflower Fund, a slight narrowing of the price difference means a loss of millions of dollars.

   So, they need to stand up in the market!

   "6.40, place a sell order for 500 lots!"

  Hu Ping would naturally not be ambiguous at the critical moment, and directly threw out a big deal. And the bulls didn’t seem to expect that the bears would exert their strength here, and they were caught off guard by the huge sales orders of the bears, and they couldn’t hold their heads up. The September natural gas contract also fell accordingly, breaking through 6.40 quickly and falling to 6.30 in the interval.

But soon, the bulls regained their strength, and three new long positions of 100 lots flooded into the market, together with the previous sporadic bulls, they held up the 500-lot large pending orders on the short side, at $6.36. At that time, the decline was abruptly stopped, and then a buy order of 1,000 lots was placed directly at the position of 6.36, which means that today's decline has come to an end. It can be said that it is full of provocation to cross the past.

  Seeing this scene, most of the bears in the market waited with bated breath for an "surprise" in the market. Anyone can see that this is a provocation to the bears just now. The smarter short sellers began to close their positions immediately. The price difference just now was enough to satisfy them. The 1000-hand defensive order, except for the big short just now, even if all the short sellers in the market attack together, I am afraid that one I can't eat for hours.

After five full minutes, the price of natural gas in the market fluctuated between 6.37 and 6.38. All the transactions were orders of a few or dozens of hands. There was no large order of hundreds of hands that people expected. Apparently, the other party died down. I don't know if it was because of insufficient funds or because the price was in place. In short, it didn't appear in the market.

And as the news spread that frustrated the bears, the September natural gas futures contract also began to turn around. After all, from the previous trading day to the current price, it has fallen by more than 9%, which is an astonishing figure. The short positions that have been transferred have already made a lot of money at this time, and it is only natural to close when they see a good deal.

  The price started to rise, and soon broke through the 6.40 natural gas contract, re-entering the normal trading track. Pending orders with small lots are frequently traded, and the price also fluctuates up and down on this basis, but the range is not very large. Large institutions seem to be not very interested in today's market, so the number of sales is not too many.

  …

   "Why didn't you take action just now and knock them down all at once?"

  Shortly after the end of the transaction, Hu Ping's team held a one-day summary meeting. The September contract of natural gas was finally pegged at $6.46, a drop of 9.65% compared to the previous trading day. This market can be said to fluctuate quite violently, but considering the market that was raised by rumors in the previous month, this range can also be said to be within the normal range.

  Although they worked hard, Hu Ping's team only opened less than 1,500 new positions on this day, with a total of 3,000 hands, and because they were distributed in various months, it didn't look so glaring. However, compared with the position to be accumulated, this lot is obviously a lot worse. When repeating today's market situation, Jiang Shan was the first to stand up to refute Zhong Shi who called for a halt to the action at that time.

  Although he knows that the other party is the big boss of the investment, Jiang Shan can't stand this kind of pointing and pointing during the trading process. He always thinks that he is the most professional.

"We have already hit his sore spot, and the reason why he put on a 1,000-hand posture is to force us out!" Zhong Shi touched the tip of his nose, his expression slightly embarrassed, and he just smiled lightly at the dissatisfaction on Jiang Shan's face , he waved his hand and said, "If we are in the clear, he can find out our details through various temptations, and they will close their positions and leave the field before we attack across the board. This is definitely not what we want to see Arrived."

After a pause, he continued: "False and real, real and false, this is the true meaning of trading. If you just focus on fighting blindly and expose your intentions, you will die in this market very quickly. On. If my guess is correct, they will definitely increase the price crazily when the market opens tomorrow, trying to widen the price difference between the near month and the far month.”

"You mean..." Hu Ping, who had been silent for a long time, his eyes lit up, and when he looked at Zhong Shi again, he saw the other party nodded at him, and said boldly, "The price difference between the current positions has been given to them. caused losses, so they can't wait to show a aggressive posture in the market, so as to scare off others who dare to covet them?"

"It should be like this!" Zhong Shi stretched out a finger, nodded slightly at Hu Ping, and then said, "Today's market is quite strange. On the one hand, it may be due to the change of the moon, and there may be other factors. It may be because of fear. Natural gas delivered last month is back on the market, although this is extremely unlikely. But in any case, the price difference caused by the decline in recent months has affected the profits of their positions, and they will pull the price difference back within the limits of their tolerance."

   "So, tomorrow's market will go up?" Jiang Shan asked this time.

   Zhong Shi was well aware of his small thoughts, but he didn't intend to point it out, and said without hesitation: "Yes, that's what I think!"

  Jiang Shan didn't say anything else, he just turned his head away, exchanged glances with the familiar trader quickly, and then continued to listen to other analysis with a calm demeanor.

  This bell stone is nothing more than that! At the bottom of his heart, he thought so.

   Thank you very much for your active support during this time! Although there are many difficulties, the author will still try his best to persevere. In the future, the author will plan the writing progress carefully, try not to have continuous updates, ensure that everyone can see new content at any time, and strive not to let everyone disappointment. I hope everyone will continue to support and give the author more motivation, thank you!

  (end of this chapter)