The Son of Finance of the Great Age

  Chapter 55 Stock Index Put Options

In the round of global stock market decline in 1987, RB was undoubtedly the strongest one. It only fell by 15% and stood firm. As a result, global funds flocked to RB.

  As early as the appreciation of the yen, capital with a keen sense of smell sensed the opportunity, and couldn't wait to exchange other currencies in their hands for yen and invest in RB's capital market. In order to offset the impact on the real economy caused by the appreciation of the yen, RB also announced various measures such as lowering interest rates. As a result, most of the capital flowed to the real estate market and the capital market, and not much real investment was made in industry.

  RB stock market has experienced a super bull market.

After the stock market crash in 1987, U.S. Treasury Secretary Baker asked RB to continue to lower interest rates in order to attract capital from RB to return to the United States. In fact, even with the sharp appreciation of the dollar, the trade deficit between the United States and Japan has not been resolved. RB manufacturing is still flooding the US market, which is the best basis and excuse for currency devaluation.

  RB had no choice but to succumb to this pressure, and the government lowered interest rates again, which led to a flood of liquidity. To put it bluntly, there is simply too much money circulating in the market!

Due to the appreciation of the yen, it has brought a heavy blow to importers and exporters. In order to make up for the shortfall of the decline in exports caused by the appreciation of the yen, RB companies have borrowed money from banks at low interest rates and turned to high-yield stocks and stocks. The real estate market, together with international hot money, has caused the unprecedented prosperity of the RB stock market.

  In 1986, the Nikkei index was still at 13,000 points, but in September 1987 it rose to 26,000 points, fully doubling, which means that the net worth of every investor who invests in the stock market has at least doubled. And the rise in this number continued until 1989, when the Nikkei reached its historical peak of 38,915 points.

  Under such a general environment, RB people with a large amount of capital began to buy frantically overseas. They seemed to disdain the price at all, and bought what they wanted with a checkbook in their hands.

   There is even a story circulating in the market, saying that the Americans are going to sell a building to the RB people. The Americans offer 400 million US dollars, and the RB people also agree. As a result, in just a few days, the RB people suddenly brought a new contract, and the amount on the contract was 610 million. The Americans were greatly surprised, ecstatic and puzzled To understand, I had to ask the RB people, but the RB people explained lightly: "Just the day before, their boss saw the Guinness World Records, the highest price for a building sold in history was 600 million US dollars, and they wanted to break this record. "

   In order to break a world record, another 200 million US dollars must be sent out for nothing. This logic is enough to prove that RB people are not short of money.

In 1989, RB people's purchase of American assets reached a peak. In June of this year, Columbia Pictures, one of the seven largest film companies in the United States, was acquired by Sony for 3.4 billion US dollars, which greatly shocked all walks of life in the United States. . Shortly thereafter, RB manufacturer Mitsubishi purchased Rockefeller Center, one of the national symbols of the United States, for US$1.4 billion.

Rockefeller Center is a complex of nineteen commercial buildings that occupies three blocks of Manhattan. It was designated as a "National Historic Landmark" by the US government in 1987. It is the largest privately owned building complex in the world and a symbol of Modernist architecture, landmark of capitalism.

Although the twin towers of the World Trade Center, a rising star, stole a lot of limelight, Rockefeller Center has existed for a long time and was built during the Great Depression. At that time, it provided New York with more than 50,000 jobs, more than the young World Trade Center. A lot of history and meaning.

Such a building was acquired by the RB consortium, which is no less significant than erecting the RB flag on Capitol Hill. The entire United States is discussing it, and some people even said worriedly: "RB does not know when it will buy the Statue of Liberty." !"

   Not only these iconic buildings, but also ordinary real estate RB people. After all, compared with the housing prices of RB, the price of real estate here is too cheap.

  Someone once calculated that the combined land prices of RB Tokyo at that time could buy the entire United States, which was enough to see how high the housing prices of RB were at that time.

  In fact, in later generations, not only in RB, a similar situation occurred in the capital of another country. This is still 20 years later, but everything is very similar to RB at the time.

  The only difference is that the asset bubble in that country was burst early in the stock market, which also led to a sharp decline in the wealth of most shareholders.

  However, in the real estate market of that country, due to the difference in land ownership and the influx of a large amount of capital, the degree of skyrocketing housing prices is no different from that of RB.

   And more importantly, land has become an important means of fiscal revenue, so even when housing prices hit record highs, the government of this country can only grit its teeth and persist.

   This naturally suffered a generation of young people.

   No more gossip, let’s continue talking about RB in the 1980s.

At this time, with the crazy rise of the stock market, the entire RB island fell into a frenzy. People even believed that there was something different in RB's stock market that was different from foreign countries and surpassed economic laws, and these things could make the RB stock market strong and unstoppable. Fall, never fall.

  The only RB people who have been in a sober state are probably the officials who formulate policies in the Ministry of Finance.

   In 1986, Nikkei 225 Index futures were traded on the Singapore Financial Futures Exchange.

The so-called Nikkei 225 Index, also known as the Nikkei Average Stock Price Index, is a stock price index of 225 varieties of the Tokyo Stock Exchange launched by RB Economic News. This index lasts for a long time and has good comparability , which has become the most commonly used and reliable indicator to investigate the long-term evolution and latest changes of RB stock market stock prices.

  After Singapore launched Nikkei futures, RB and the United States also launched Nikkei futures one after another. However, since Singapore is the first market to launch Nikkei futures, its trading volume and influence are also the largest.

The reason why Zhong Shi didn't buy Singapore's index futures is that futures need to be observed all the time, and if he is not careful, his position will be liquidated. Although he is not afraid of this risk now, it is better to invest in the RB stock market after all. People rest assured. He invested more than 10 billion yen in the RB stock market one after another. In this bull market that only goes up but not down, he can be said to be sitting firmly on the high platform, just waiting for the time to come.

  In fact, not everyone is as crazy as RB stockholders and entrepreneurs. In the eyes of American financial elites, RB's stock market has already exceeded the scope of a normal bull market and has greatly formed an asset bubble.

  In this case, the elites of the investment bank designed a brand new financial derivative product, which came to RB and sold it aggressively. This is the stock index option.

  Stock index futures and options are two different concepts. The American investment banking elites who lead the global financial revolution combined them to produce a new product, which is stock index options.

   This kind of thing is still an option in essence, but the underlying object is replaced by stock index futures.

  Generally speaking, there are two types of options: long and short. Finally, the results of VAM are divided into two types: execution and non-execution, and futures are also divided into two types. In this way, there are four different varieties.

  The leverage of options is generally ten to one hundred times. Depending on the type of underlying asset, different option premiums are selected, and the leverage of futures is roughly the same.

   It has to be said that the financial innovation of the United States has greatly advanced to the forefront of the world.

American investment bank elites sell stock index put options in RB. This option is a financial product that can be executed when the stock index falls to a certain position. the underwriters.

  This brand-new financial product was unheard of in RB. When those big financial groups heard about it for the first time, they were extremely surprised. They realized that it was a good means of hedging and bought a lot of it.

  How does this kind of thing avoid risks? If there is a fund of 10 billion yen in the stock market, then the holder can buy a stock index put option of 100 million yen (assuming the leverage is 100 times), when the stock index falls below a certain amount , At this time, the option can be selected to be executed, and converted into a certain number of short-term index in the stock index market, which can play a role in hedging risks.

  Naturally, it is impossible to fully hedge this risk, unless he holds the same position in different directions, then in this way, there will be no profit at all, and a large transaction fee will be attached.

  In the RB stock market, the insurance company is an extremely important investor. Unlike other industries, the insurance industry attaches great importance to avoiding the risk of funds, so it is also the consumer group that can accept this new product the fastest.

   After all, no one can predict what will happen in the future, Zhongshi is an exception.

  After experiencing the global stock market crash in 1987, Zhong Shi really stopped for two years. He obediently went to school for a few days.

   Every time he went out alone, Zhong Jianjun and Liu Lan felt relieved as the number of times increased. In the past two years, he has obviously grown taller. A thirteen-year-old child has grown to a height of 1.7 meters. Coupled with his strong body, it makes people feel that he is already a seventeen or eighteen-year-old.

  His elder sister Zhong Xiaohui continued to study hard in the high school in the county seat. He heard that her grades were very good and she hoped to be admitted to a prestigious university.

   On this day, Zhong Shi had just returned home, and before he could wash off the dust all over his body, he received a call from Hong Kong, it was Zhong Yi!

In the past two years, Zhong Yi has been very proud. Apart from his academic achievements, he has also become good friends with Liao Xiaohua. The two are about the same age and belong to the same camp. Naturally, they have nothing to say, and Hong Kong When the media accidentally discovered that Zhong Yi lived in a mansion worth tens of millions in Repulse Bay, he was the only one who gave him the title of "Noble Young Master".

   "What's the matter? Your son?" Zhong Shi joked on the phone.

   "House prices in Hong Kong are plummeting now. I heard that it was affected by the incident in Yanjing. Now many people are eager to move to Hong Kong. Are we going to do something?" Zhong Yi smiled and started talking about business. (I hope that all book friends will continue to support, your support is my motivation, thank you very much!)

  (end of this chapter)