The Son of Finance of the Great Age

  Chapter 760 The Death of Small Fund (7)

  Dreams are beautiful, but the reality is quite cruel!

As soon as the time for the opening of the United States arrived, the price of gold began to fall crazily from $1110. The speed can be described as a thousand miles, and the market was full of long positions and short positions from all over the world. To the point of being stunned, there were more than 10,000 empty orders, which were hung up at the opening of the market.

  In this case, the bulls have no way to stop the decline, because this is the trend of the market. At the moment, they can only avoid the edge temporarily, let go of the gold price and let it fall freely.

  Integer points such as 1110, 1105, 1100, 1095, etc., were rushed away by the short sellers like a smashing bamboo, and the market had no ability to resist at all. And this kind of decline exacerbated the amplification of panic, and the institutions that threw away their long orders became more and more frantic.

   The shorts were crazy, the bulls dodged, and the price of gold was out of control and kept falling. Before it fell to $1065, there was no sign of any major bulls appearing.

   "Over 4%!"

  Collen Smithen closed his eyes in pain, and asked Jack Mullen beside him in a low voice, "How much did we lose?"

   "..."

  Jack Mullen didn't speak for a long time. He didn't dare to tell his boss that from the opening to the present, they only closed hundreds of long orders, because they couldn't make a deal at all. Even if their traders had sharp eyesight and quick hands, they put up the order and successfully completed the transaction, but the quantity was very small, because the price fell beyond their imagination the next moment.

  Compared to KS&JR's 8,000 long positions, the liquidation of hundreds of long orders is only a very small part, and because the position was increased at a high level two days ago, even if these orders are liquidated, it will still be a loss.

"and many more…"

While Collen Smithen was still waiting for Jack Mullen's answer, Williams Roger suddenly shouted, "Is there something wrong with the system? Why is the number of positions displayed here reduced by one?" Mostly?"

"what?"

  Jack Mullen suddenly felt shocked, and hurriedly looked at the screen again, but was surprised to find that in the column of total positions, KS&JR had reduced by as much as 5,000 lots, and there were only more than 2,000 odd lots left on the book.

   "Who? Who the hell?"

  He suddenly became ecstatic, stood up and shouted loudly to the traders, "Who successfully matched? God, you really made a great contribution! I must reward you, right now!"

  Looked at Jack Mullen blankly, and then Colum Smithson's eyes stayed on the screen. This look made him equally ecstatic, "My God, we evened so many odd numbers?"

   He cried out in disbelief.

   What responded to the two of them was the more blank eyes of the traders.

   "Who? Who the hell?"

Jack Mullen shouted anxiously, "No matter who it is, don't rush to reveal your identity, anyway, we will find out who it is based on the transaction records. Now, I need you to continue to work hard to close all long positions!" Remember, it is all leveled!"

  Traders reacted quickly, and after a little thought, they understood what was going on. At that moment, several traders exchanged glances with each other, and when they looked at Jack Mullen again, there was an inexplicable meaning in their gazes.

   "Stop shouting!"

  Williams Roger seemed a little bit uneasy, walked over and patted Jack Mullen on the shoulder, and said in a low voice, "That's not what the trader did, but the broker!"

   "What? Broker?"

Not understanding it for a while, Jack Mullen asked subconsciously, and then the joyful expression disappeared from his face instantly, like the sea at low tide, and then his voice became trembling, "You mean, we ... was liquidated?"

"good!"

The corner of Williams Roger's mouth twitched slightly. After hesitating for a while, he still couldn't help explaining, "Our leverage, which triggered the minimum insurance premium ratio, has been actively triggered by their program to close the position. Because of the speed of the decline Too fast, they didn't even have time to make a deposit call!"

   "This...Is this impossible?"

  Jack Mullen was dumbfounded.

  When operating in the futures market, because the futures itself has leverage, it is generally about 10 times to 20 times, depending on the amount of margin of the trader and the real-time futures price. But if you are not satisfied with this leverage, investors can still increase leverage through brokers.

  Of course, for brokers, they can lend leverage, and there must be some risk-avoiding measures, just like futures exchanges, there is a minimum margin rate for maintaining positions. For brokers, when there is a problem with their leveraged positions, the risk is equivalent to being passed on to their funds. Therefore, within them, there is also a risk control position for forced liquidation of leveraged positions again. .

   This position is much higher than the exchange stipulated!

KS&JR currently has 8,000 long positions, of which nearly 4,000 are leveraged by brokers. The average price of these positions is around $1,100. The price of gold has fallen by 4% so far. 2 times the leverage of brokers plus the exchange itself A leverage of more than 10 times means that the loss of this part of the position exceeds 80%. In this case, the broker made a prompt decision and decisively chose to forcibly close the position.

  The reason for adding another part, exceeding 4,000 lots, is because the broker considers market liquidity. In case the price falls further, the liquidation of 4,000 lots will not make up for the funds they have released. So on their side, they chose to close out more positions.

  In fact, they also left a part of the position for KS&JR, which is already the best of benevolence. Because according to the current loss ratio, the entire KS&JR position has been equivalent to a burst.

   So far, the price of each gold contract has dropped by $45 on the disk, that is, the real $4500. For a contract of 4,000 lots, the loss was 18 million US dollars. This is not counting KS&JR's other losses. For a fund of less than $100 million, this number is simply disaster.

  The most terrible thing is that the average price of those positions that once earned more than 50% of the profit was above $1065, that is, this part of the positions also suffered losses to varying degrees. In other words, KS&JR's losses so far have far exceeded this level.

   "Why is it not possible?"

Williams Roger is still calm, but the corners of his eyes are also twitching rapidly. It is obvious that his heart is quite uneasy, "From the moment the position is closed, we will be completely finished! Unless there is a miracle, we will still be involved." Debt dispute!"

  The current market situation is that liquidity is insufficient, and the possibility of further decline cannot be ruled out. If the final closing price of the broker is much lower than it is now, not only will KS&JR’s entire position be insured, but if the money lost in closing the position is not enough to compensate the broker for lending funds, then the two parties can only go on the other side in the end. The way to solve it does not even rule out a lawsuit.

   "I can only expect a miracle?"

  Jack Mullen glanced at Colum Smithon sympathetically, shook his head helplessly, and repeated to himself, "I can only hope for a miracle!"

   As an employee, even if the KS&JR fund really goes bankrupt, for him, it is just a place to change jobs. But for Colum Smithen, it was tantamount to the end of the world. Because of the different positions, Jack Mullen's mood quickly improved after experiencing the initial depression.

   "A miracle really happened?"

   At this moment, Collen Stilson pointed at the screen and shouted loudly, "My God, is this all true?"

  Jack Mullen and Williams Roger were stunned for a moment, and the next moment they immediately got busy, tapping the keyboard to refresh the page, and found a scene that shocked them.

  The 30,000-lot buy order is neatly hung on the five gears below 1065, with 6,000 lots in each gear, which is absolutely generous.

   "It seems that the main force is about to enter the market, supporting the current price!"

  Williams Roger touched his chin and said in thought.

   "I just don't know if they have this ability!"

  Jack Mullen gave a wry smile, and was not very optimistic about the other party. "The shorts have already formed a momentum. In this case, I don't know how much to invest in to stop the decline. I'm afraid that the bulls don't have the strength!"

  Generally speaking, when the price drops to a certain stage, there will be funds entering the market to buy the bottom. Because perhaps at this time, the price has met their expectations, and there may be a rebound in the future, or they may think they have the ability to stop the market from continuing to fall.

  The bears in the market finally have an opponent!

With an opponent, it means that there is a chance to be taken over. At present, countless short positions in the market have flooded out again. This is a good opportunity for them to escape. The two sides started a quick transaction at the position of 1065 US dollars. jumped out. It didn't take long for the first line of defense to be exhausted.

   Immediately afterwards, the second line of defense also fell, followed by the third and fourth lines...

  Five minutes later, the five lines of defense announced their failure one after another, and the price of gold continued to fall, and soon fell below $1,062, and it was about to reach $1,060 and below.

   At this time, there was another scene that shocked the entire market.

   At the five gears of 1060.6, 1060.5, 1060.4, 1060.3, and 1060.2, there was a huge amount of buy orders again. This time it is not a balanced arrangement, but an inverted pyramid array. Among them, at the highest position of 1060.6, a full 30,000 lots of buy orders were placed, at the position of 1060.5, 20,000 lots of buy orders were placed, and the scales below were 15,000 lots, 10,000 lots and 5,000 lots.

  The total scale reached 90,000 lots.

   This number is insane!

   It is important to know that the average daily trading volume is only about 300,000 lots. That is to say, if the buy order is actually executed, at least 90,000 lots have been written in terms of trading volume, which is one-third of the average trading volume.

   Facing the huge payment, many people began to hesitate.

   You must know that this situation is definitely due to the emergence of main funds. This means that there is a huge divergence of opinion in the market. For following suit, now there is an opportunity to re-select.

  As for the main short sellers, they don't care about these things, and they rushed in with huge profits. At the position of 1060.6, the crazy fight with the main bulls began.

  Although a line of defense was set up above, the bulls did not seem to change the market trend much, and short open and long flat orders still emerged like a tide. Even if a large number of buy orders are thrown out again now, the formation of the inverted pyramid seems to tell the market that if you can break through this line of defense, the main bulls will give up completely.

  Naturally, the bears are also well aware of this. They are very clear that once the first line of defense is broken, the following lines of defense are basically useless. Therefore, the bears hardly left any time for the market to think, and launched a tough battle against the bulls' defense.

   30,000 lots of buy orders hung there, disappearing at a speed visible to the naked eye. There were more than 28,000 lots in the last moment, but it jumped to 27,000 lots in the next moment. The speed of this consumption is almost at the rate of 1000 hands every five seconds. Soon, about ten minutes later, the bulls' first line of defense was wiped out again.

   But when it comes to the second line of defense, the situation immediately becomes different.

  The follow-up orders and liquidation orders in the market have basically achieved their purpose. Among them, the liquidation order successfully liquidated the long position on hand. At this time, what they want is to make a profit as soon as possible and earn back the original floating loss. As for the follow-up market, the new short positions they opened with great difficulty have already steadily earned the floating profit into their arms by this time, so what they do in the future has little to do with them. In this case, they choose a direction that will win.

   There is no doubt that the bulls are valued by them for their strong financial strength.

  For the main short sellers, they finally captured the first line of defense, and their own losses were also huge, because the newly opened positions required a lot of funds. Originally, they still planned to rely on the power of the follower, but soon they discovered that the follower was on the opponent's side.

  The most important thing is that on the next line of defense, there are 20,000 pay orders, which is not much less than the previous line of defense. But at this time, the bears can only bite the bullet and continue to attack downwards.

  Obviously, the attack of the bears was almost at the end of their strength, and ten minutes later, the outcome was really decided. I saw that this line of defense was as stable as Mount Tai. Although the bears invested a lot of troops, they still couldn't shake the bulls.

  The market of this day has set the tone.

   Then an interesting scene happened. The bulls seemed to have no intention of attacking upwards, but the followers who bet on the right direction began to attack upwards impatiently. As a result, it was naturally taught a lesson by the main short sellers who were waiting in battle. In the end, the price of gold only rose slightly by 3 US dollars, and then stopped going up.

   On this day, the COMEX gold contract fell by 49.1 US dollars, a drop of 4.41%. For many funds, this is a dark day, and their net worth will shrink on a large scale. For some other funds, they feel very lucky, because this decline has brought them a lot of wealth.

   During this transfer of wealth, many small institutions disappeared forever, including small and radical funds like KS&JR. However, for Collen Smithen, the final closing price is also considered a boon to him, because after his position was forcibly liquidated, he still has a surplus of several million dollars, and it is not considered a total loss.

   So much so that after the market closed, he thankfully said: "There is no need to go to court!"

   All in all, it was nothing but a dull day in gold trading history!

   Thanks to book friends Sonn Tianzi, hhr111, dickvcxz for voting monthly! Thanks to the electromagnetist for continuing to reward! I am very happy to see new faces voting for it. The author expresses his gratitude and hopes that more and more book lovers will vote actively. The achievement of this book requires everyone's joint efforts!

  (end of this chapter)