The Son of Finance of the Great Age

  Chapter 135 Pushing up oil prices (1)

  The next day, with the assistance of Linda, Zhong Shi opened three different accounts in the brokerage department of HSBC, corresponding to the offshore financial companies that Zhong Shi had registered in advance.

The reason for doing this is that the position in a single account is too large to attract the attention of the regulators. For this reason, Zhong Shi also specially found another futures brokerage company to divide the positions, which is also to prevent the monitoring of exchanges, SEC and other institutions. .

  Judging from the places where these accounts are registered, people with a discerning eye know that the funds in these accounts are speculative, and operations in the market are of particular concern, especially when large funds smash in one direction. We must know that the original intention of the futures market is to avoid the risk of crude oil prices. Whether it is the spot market or the futures market, oil producers and refiners can participate, while speculative funds or institutions are strictly restricted from entering the spot market. .

  The spot market and the futures market are two relatively independent markets. The spot market is commonly known as bulk commodities. Unlike the futures market, which only trades contracts, each contract here corresponds to a considerable number of commodities. For example, buying one contract in a certain spot market means that a thousand barrels of crude oil that meets the delivery requirements of NYMEX change hands, and the same is true for selling contracts. Because of this, the scale and capital flow of the spot market are much smaller than those of the futures market.

According to common sense, these two markets are in a competitive relationship, but it is with the supplement of the spot market that the long and short sides of the futures market can better complement each other. For example, short sellers can buy crude oil in the spot market for delivery, Longs can also hedge with shorts in the spot market.

But this design also has disadvantages, such as a typical long-squeeze, that is, the long side wipes out all the crude oil in the spot market, and then forces the shorts to deliver in the futures market. In this case, what the shorts can do is to cut the meat at a high price , admit defeat and leave.

  With a long-squeeze, there is also a short-squeeze, and the operation method is basically the same, but if the long is a large oil refiner, this situation will be self-defeating. For these two situations, the amount of funds consumed is huge. As long as you pay attention to the changes in the current positions in the two markets and maintain the normal monthly changes in positions in time, you can avoid similar situations to a large extent.

For funds that are inconvenient to participate in the spot market, there are more ways to hedge. For example, in different months, diesel oil, aviation oil contracts, and even North Sea Brent crude oil (IPE) markets can be used to hedge corresponding positions. It is impossible to hedge all risks.

Ironically, hedge funds were born to avoid unsystematic risks, and even claimed to be able to avoid systemic risks. However, due to the nature of private equity funds and the pursuit of absolute returns, such funds often look for After one direction, all-in-one operations are carried out to maximize profits and maximize risks.

However, this era is no longer the era of commodity funds, but the era of hedge funds based on macro strategies. The risk is minimal. Just like Quantum Fund, it can unscrupulously use leverage to attack the British pound, because even if the British pound does not depreciate in the end, what Quantum Fund pays in the end is only a period of interest and a small loss caused by foreign exchange.

  And like commodity futures, it is almost impossible to make a billion casually. Take the WTI futures contract with the largest contract activity and trading volume as an example, the amount of funds that can be accommodated every day is only about one billion US dollars, and the open interest is fixed at around 300,000 lots per day. Even with half the position of 150,000 lots, the price of oil needs to change suddenly by at least six dollars. No matter whether the price of crude oil rises or falls by six dollars, it is enough to shake the entire world economy!

Having said that, in the past few days when Zhongshi was making preliminary preparations, the price of crude oil did not change much. The price fluctuated slightly every day, and the long and short sides also engaged in small-scale battles. The final result was There are winners and losers, but no one can do anything to each other.

   This situation was broken on September 28th. It was also on this day that Zhongshi’s one billion US dollars of funds were officially in place, and they were transferred to five accounts. The accounts of Zhong Yi and others each have 100 million US dollars, while the remaining accounts are temporarily kept in the HSBC account, ready to be used as a reserved reserve at any time.

The November crude oil contract opened at US$18.16 on this day, which was US$0.04 higher than the closing price of the previous trading day. This is a good sign. After a little contact, the practice is to start a contact battle step by step.

"Open 10,000 more lots, push the price up to 18.20, and then withdraw all unfilled orders, immediately!" Without Zhang Jiaqiang, Zhong Shi is now in charge of all strategies and commands. When he was tentative, he immediately issued a trading order.

  10,000 hands correspond to 10 million barrels of crude oil. After a little shock, Li Mingyang immediately typed instructions on the keyboard, showing his good professionalism. On the contrary, Zhong Yi, Liao Xiaohua and the others were taken aback after hearing Zhong Shi's words, and then Qi Qi looked at Zhong Shi, seeing the serious expression on his face, as if he had said something wrong, they reacted one after another, rushing The ground hurriedly tapped the keyboard.

   Soon, 3583 lots of 18.18 buy orders appeared on the purchase price list, and then quickly jumped to 4583 lots, 5583 lots, and 6583 lots. The three successive increase orders of 1000 lots immediately stunned market participants. Before they could react, the empty orders at $18.18 were wiped out, and the contract price immediately jumped to $18.20.

This shows the unprofessionalism of Zhong Yi and others. At this price, a large order of 3,000 lots was thrown out. There is no need for them to place another pay order at this price, but they have no relevant experience. Only then did other participants in the market shout that they could not understand. Fortunately, Li Mingyang has rich experience. After the price jumped to 18.19 US dollars, he then placed a buy order of 1,500 lots, and once again swept all the sell orders at this price, and the oil price followed the predetermined price of 18.20.

  Seeing that the oil price has jumped by two levels one after another, no matter how slow the long and short sides are, it is time to react. Immediately afterwards, a short order of 500 lots was opened, followed by an empty order of 1403 lots appearing on the screen, and almost at the same time, another long order of 1479 lots also appeared on the buying order.

  The battle is waged!

   "Remove all unfinished orders!" Zhong Shi shook his head helplessly at Zhong Yi and the others, and then said expressionlessly. According to the trading rule "time priority, price priority", the order lower than the current transaction price can only be closed when the price reaches 18.19 again, and there is no point in hanging it.

  The faces of Andrew and the other three suddenly showed shame. Liao Xiaohua and Zhong Yi are better. Andrew has a professional background and has been operating stock index futures for some time. Naturally, he is not a rookie, but it is unreasonable to lose the chain at such a critical moment.

   While the three of them were hurriedly withdrawing the unfinished orders, Zhong Shi walked up to Li Mingyang and asked quietly, "How is it? How is the market's reaction?"

"It's hard to say, it's estimated that we will have to fight at this threshold for a while. Look, should we change hands now for the 2047 lots that we dealt, or wait until the situation becomes clear?" Li Mingyang looked at the screen carefully, thoughtfully Said.

   Just now, the price jumped to two levels in an instant. Most of the sales orders in the market were absorbed by Li Mingyang's account, and the other three basically did not absorb much. Zhong Shi naturally asked Li Mingyang for his opinions on the follow-up operations.

   "Okay, let's wait and see!" Zhong Shi thought for a while, and agreed with Li Mingyang's point of view.

The bulls and the bears have been entangled for a long time at the position of 18.20. In the end, the bears were still unable to defeat the bulls. The oil price began to rise after breaking through 18.20, but every price encountered fierce resistance from the bears. This resistance finally reached its peak at the position of 18.30. However, the sentiment of the market has been completely mobilized by the bulls, and many short sellers with smaller positions are also closing their positions one after another, or even going long backhanded. These closing orders and new long orders have brought great pressure to the short sellers.

   "How is it? Can the bears resist?" Seeing the successive rises in oil prices, Zhong Shi couldn't understand it again, so he quickly asked the professionals next to him.

  Li Mingyang shook his head, and he didn't quite understand it. The number of pending orders on the buying and selling price is about the same, but in terms of transactions, there are many more orders opened, and the number of hands is also quite large. Obviously, this is an upward trend. After observing for a while, he said hesitantly: "I still can't see clearly, it depends on the meaning of the main bulls and when they will come out."

When this kind of market sentiment is mobilized, when the small scattered funds are unanimously bullish, it is just a good time for the bulls to make a profit and leave the market. Warehouse receipts can accept long liquidation orders.

   "Since the bulls haven't moved yet, let's add some signals to him. Close the positions, and close all positions at the price of 18.30!" Zhong Shi thought for a while, and ordered ruthlessly.

The selling price list of 2047 lots immediately appeared on the side of the selling price, followed by the immediate transaction of 1486 lots, most of which showed multiple flats and multiple exchanges. Profit out.

The sudden selling order broke the wishful thinking of the other bulls. Fortunately, they reacted extremely quickly and made a big deal before the market sentiment reversed. Then in one go, two buy orders totaling more than 4,000 lots were thrown out one after another, pushing the oil price to $18.35.

  However, at this price, the shorts also reacted, and the follow-up market who saw the good and closed their positions also began to close their positions. The two forces joined forces to hold the oil price firmly at the price of 18.37 US dollars.

   "Let's call it a day!" Zhong Shi saw that the bulls were unable to attack, so he simply stopped operating.

   Thank you very much for the monthly support of book friends Shenshu Kuangmo, book friends 090723030730750, Liangzi 913, and book friends 090320023841930! The second is asking for a monthly ticket. I hope that all book friends will continue to work hard and support until the last moment. The author will also persist until the end, and there will be another update tonight. Thank you everyone~

  (end of this chapter)