The Son of Finance of the Great Age

  Chapter 491 Risk Emergence (Part 2)

  Canada, Calgary.

   From the meaning of "clear and flowing water", it can be seen that this is a city suitable for people to live in. Because of oil and natural gas, it has become the largest energy center in Canada, the second largest energy center in North America, and the fourth largest city in Canada. Although it is the capital of energy, Calgary has been rated as "the cleanest city in the world" for many years because of its excellent environmental protection work.

  In addition to the energy center, this is also the Canadian headquarters of many financial companies, because where the "black gold" is located, capital will naturally flock in. The Canadian branches of many Wall Street giants including Goodman and Stanley are set up here, and this is one of the important towns of their commodity trading department.

   It is precisely because of this that when Bond Hunter proposed to set up a branch in Calgary, his boss Nick only agreed for a moment after thinking about it for a while.

  When the New York Mercantile Exchange stopped trading, the traders did not leave immediately, but squeezed into a conference room with a slightly smaller area, and began to discuss today's market enthusiastically.

  Originally, there was no similar meeting room in the office of the Canadian branch of the Everlasting Flower Fund. If investors were to be received, they would go to Greenwich instead of Calgary. But here, all the operating strategies only need to be discussed in the trading room. But once, after an unintentional leak, Bond Hunter rearranged the layout here, opened up the original tea room and redecorated it, and it became the current meeting room with a slightly smaller area. .

Although through the thick glass curtain wall, you can clearly see seven or eight traders sitting together and discussing something in a hurry, but even outside the door a few meters away, the people outside did not listen If there is no sound, it is enough to see the sound insulation effect of the decoration here.

Usually after the market closes, these traders will pick up the car keys and go downstairs as soon as possible, because most of the time they are making money, and other tasks such as summarization and liquidation are left to colleagues in Greenwich All right. But today, because they had just entered the September contract, the near-month natural gas contract suddenly experienced a sharp drop of nearly 10%. Such a sudden change made them suddenly nervous. After the transaction ended, no one left, and they all came here conference room.

"This should be the result of the exercise of options in August, because the execution of too many bullish options has caused heavy losses to traders. Therefore, in terms of September contracts, they first maintain a cautious attitude and observe the future market before opening Option contracts out of the far month." A trader with a mustache at the corners of his lips analyzed swearingly.

"What you said also makes sense!" A slightly older trader nodded, but quickly gave his own judgment, "It may also be due to the relationship between the moon and the temporary fluctuations in the market. Every time When the month changes, the price cannot maintain complete continuity. In August, the long and short sides fought too hard, and the two sides finally closed positions and even delivered a lot of money, which was unsustainable for a while, so Let the price go down so much."

  Because the positions of the Everlasting Flower Fund are concentrated in September and October and March and April of the next year, they don't pay much attention to the main contract in August. But as soon as the month-changing time comes, it will enter the peak period of September contract trading, which is actually related to their own positions, so various speculations have emerged.

  Judging from the decline of the September contract alone, the Everbright Fund is not worried about anything, because they made a corresponding hedge in October. But because it is an arbitrage combination, the price difference between adjacent months is what they are most worried about, and because the price has fallen too fast, not only the price difference in September and October has shrunk, but even the price difference in distant months has also dropped. Quite a lot.

   "Here's the news, folks."

While these people were still discussing whether the plunge was caused by the option execution or the large-scale delivery of options, a blond trader walked in, waved the fax paper in his hand, and said: "This is according to the latest weather from NASA. The weather conditions predicted by the model in the next two months.According to their forecasts, the possibility of hurricanes forming in the Texas area in the next two months is 74.51%, and the possibility of large and super-large hurricanes is 4.45%. A little low."

  The hurricane season generally occurs in July, August and September, with August being the most common. Although the market has been buzzing before this, so far, although there have been hurricanes forming near the Gulf of Mexico, the destructive power of these hurricanes is obviously not comparable to the super hurricanes in the same period last year.

And once it enters September, the probability of forming a hurricane of this size and type will drop sharply. Although it is still possible, this possibility is far lower than that in August, and even in some people's minds, it is almost can be ignored.

  So after hearing his words, the faces of all the people present changed immediately, and the originally noisy conference room was suddenly silent, leaving only the sound of gasping for air.

  They all know that weather factors play a very important role in natural gas trading, and it is not an exaggeration to say that they "depend on the weather". You must know that Bond Hunter's transaction of over one billion dollars was successful with the help of two rare hurricanes, and just in mid-August, NASA released a weather forecast that believed that at the end of September and October in Deke A super-large hurricane with low pressure will form in the Saskatchewan region. It is this prediction that makes the Blooming Flower Fund crush those institutions that are eyeing their positions.

   Now, the bad news is coming, which can be described as "unpredictable". Even NASA uses the most advanced weather model, it is impossible to correctly predict the weather conditions in the next few months or longer.

   "Guys, don't panic too much, at least so far, no organization has dared to stand up against us again!"

   Just when everyone was flustered, Bond Hunter, who had been silent all this time, finally spoke. No loss is the core of the whole team. When he spoke, everyone relaxed in unison. This may be the charm of a leader.

After looking around calmly, Bond Hunter said calmly: "Let's not talk about the weather, judging from today's situation, there are indeed people coveting our positions. But judging from the fighting situation, The other party is not a party with strong financial strength, so we don't need to worry about it."

"Even if the arbitrage combination in September and October fails, our key position is not here, but in the far month. As long as the cold air from the Arctic crosses from the Great Lakes of Ontario to the United States, we don't need to worry about it." .”

"However, even so, the narrowing of the spread of positions in recent months will have an adverse impact on our positions, so we must do something immediately to prevent the negative impact of this news. Do you understand, gentlemen, tomorrow , starting tomorrow, we will launch a counterattack in the market to let the opponent, even though we don't know who the opponent is, know how powerful we are."

"what?"

   "Are we going to add to the position?"

"In this way, our position will be huge. You must know that we now hold more than 80,000 positions. If we increase our position, we may be suspected of manipulating the market. And if there is a loss , I’m afraid our position can’t be maintained anymore.”

   "That's right, and according to our large-scale position, if there is a situation where we can't sustain it, it will be difficult to close the position, and it will be an avalanche of losses at that time."

After hearing Bond Hunter's words, the traders immediately exploded. They were very clear about their current positions and possible problems, so when they heard that Bond Hunter was going to continue to increase their positions, most of them Do you think your boss is crazy? Doesn't he know the consequences of doing so?

   "Don't worry, everyone, I have already anticipated the situations you mentioned!"

Facing all kinds of doubts coming to his face, Bond Hunter just curled his lips slightly, with a look of disdain on his face, "If we didn't dare to take risks, how could we have made so much profit in the past. Guys, managing risk is what the guys in Greenwich want to think about, and all we have to do is make money, make money, make money."

   "And, even if we close our position now, the market will never let us go. Our position is too large. So, no matter what, we have to defeat the other side, understand?"

  Hearing Bond Hunter's words, everyone's face darkened, and then fell silent. They really couldn't think of any suitable reason to refute. Because of their aggressiveness, their unclosed contracts now account for at least 30% of NYMEX's unclosed contracts. Once a contract of this size is to be liquidated in the market, it will inevitably cause huge shocks, so it is too late to stop now up.

   Defeating the opponent is their only possible way out.

   "Don't worry, the headquarters is obeying my words now. I will send out an application later, and transfer some funds from there. In addition to the current floating profit on our position, it should be enough to defeat any opponent."

After explaining the situation clearly to everyone, Bond Hunter lost no time in reassuring himself. If they really have a huge amount of funds, at least they can increase the price difference between the long-term contracts. In this way, they can continue to To maintain the current position, from now to March next year, there will be at least half a year, which is enough for them to slowly release these positions in the market.

  There is no way out, we can only bite the bullet and move forward. This has become the consensus in everyone's mind. After discussing for a long time, the traders left the meeting room listlessly, and went home without expression.

  Bond Hunter didn't leave. He sat in the meeting room, smoking a cigar and thinking. Today's price drop has caused a huge loss to his position, but this is not unacceptable, because the current floating profit of their position is nearly one billion U.S. dollars, and after this day's loss, his various combinations There is still a lot of floating profit on the account.

After thinking clearly about financial issues, he thought that not long ago, his boss Nick had boasted in the Wall Street Journal that he was "good at risk control and measurement", but in a blink of an eye, he was close to entering no way no money.

   After thinking and thinking, Bond Hunter finally let out a long sigh and called Greenwich. He needed to transfer funds from the headquarters.

  After Nick on the phone heard Bond Hunter's analysis and reassurance, he discussed with a group of high-level officials, and finally allocated another billion dollars from the fund pool to Canada. Like Bond Hunter, he was also facing a situation where he had no way out. If the most profitable trader in his company failed, his fund would be close to being liquidated. Therefore, he must hold on to the end.

  …

   On August 29, when the natural gas contract opened, the price rose to $6.78, which was a full $0.32 higher than the closing price of the previous trading day, an increase of 4.95%, which shocked the market.

   I’m sorry that it’s a little late today, but it’s okay to write it out, thank God~

  (end of this chapter)