The Son of Finance of the Great Age

  Chapter 788 prohibits naked shorting

   It is well known that short selling is also a way of investing. Only under the joint action of long and short can the stock market truly become a "barometer" reflecting the economy.

  In other words, a capital market that is only allowed to rise is definitely not a complete and healthy capital market.

  This time, the German government used an administrative order to prohibit naked short-selling, which is good from the point of view, because short-selling in the absence of a spot is very speculative, and their starting point is to limit excessive speculation due to market sentiment.

  But what the German bureaucrats overlooked is that even in the United States, where the capital market is highly developed, they dare not use the means of prohibiting short selling. Because once this killer weapon is sacrificed, the market will often not develop in the direction they expected, but the situation will become worse.

   Yes, exactly the opposite effect.

   To put it simply, it is normal for a stock to be bullish or bearish, and it is normal to have different opinions. And once short selling is banned, it almost expresses to the market that this stock is very risky. Although this will not be the original intention of the management, the market will interpret it as a major problem with this stock, so that the government has to take action , to intervene in its trend.

  The next result is that market players will sell this stock desperately, and it is a little bit to get back a little bit before it completely collapses. And the price of this stock will also accelerate its decline, and it may even reach the point where it is worthless.

  This is why at the peak of the financial crisis, even though the SEC issued orders to limit short-selling of the stocks of Goodman and Stanley, the two stocks still plummeted.

  Germans obviously don't understand this, and they play it more than Americans. They directly sell 10 major German financial stocks, euro zone government bonds and corresponding CDS.

  This is almost telling investors all over the world that these stocks and government bonds are in great danger, so that the government has to take action to maintain them.

   This news almost pushed the entire world capital market into a new round of turmoil.

   Sure enough, the impact was immediate the next day. These 10 major German financial stocks fell sharply, among which Deutsche Bank fell as much as 4.6%, and Commerzbank fell 3.2% all day.

  Affected by this news, the three major U.S. stock indexes, Nasdaq, S&P, and Dow Jones, all fell by more than 1% throughout the day. Investors' panic quickly spread to the other side of the ocean.

  The bulk commodity market has also been severely affected. Crude oil directly fell below the $68 mark, while various metal varieties on the LME narrowed their gains one after another, and the short-term benefits brought by the euro rescue mechanism came to an end.

   And the biggest impact is the euro!

  The news from Germany not only sent a dangerous signal to the market, but also indirectly told the market that even after the rescue mechanism is reached, the euro zone countries are still not monolithic.

   Obviously, this move by Germany seems to be the national debt of the euro zone countries, but by the way, these 10 large German financial institutions have completely exposed their true purpose, which is still to protect their own financial foundation. You should know that even if you don't short in Frankfurt, investors can still short the national bonds and CDS of euro zone countries in London and Paris.

   Only in Frankfurt, the stocks of these 10 major German financial institutions can be bought and sold, so the original intention of the Germans is almost clear at a glance.

  This behavior of "sweeping the snow before everyone" tells the market that even at this time, the Germans still cannot forget the things in their own one-third of an acre of land.

If it is a medium-sized country or an ordinary country, this kind of influence is almost negligible, but Germany, as the most powerful and richest country in the European Union, still retains its own careful thinking on this issue, so the market cannot help but take this The impact of the news was completely magnified.

  The subsequent statements of the German allies also rapidly expanded this doubt.

  First of all, Brussels, whose finance minister expressed his "surprise" unabashedly. He said that it is very inappropriate and irrational for Germany to introduce this policy at this time.

   Immediately afterwards, Rome also issued a statement, but their rhetoric was quite euphemistic. The Italians said that they respected the decision of the Germans, but they decided that communication between them was necessary to make corresponding decisions.

  France reacted most violently. French Finance Minister Christine Lagarde said that he was very annoyed by the decision of the Germans. Berlin should inform other countries before introducing the policy, because this move has a high risk of weakening the liquidity of the bond market, which may have a worse effect on countries with major fiscal problems.

  Madrid and Lisbon also successively issued statements with similar content. Although the wording was different, they all expressed their dissatisfaction with the sudden "attack" by the Germans.

   For a while, the Germans became the target of public criticism.

   "Are you ready?"

In the Asian morning session, Zhong Shi and Jiang Shan, who hadn’t rested all night, barely pulled themselves together after drinking several cups of coffee. Among them, Zhong Shi opened his blood-red eyes and asked the eager traders, “The market will open soon, Gentlemen, get your short sales ready."

"We are ready!"

  Looking at Zhong Shi's menacing expression, the traders couldn't help but tremble in their hearts, and immediately replied loudly.

At this time, the exchange rate of the euro to the U.S. dollar has reached 1.2341 U.S. dollars to 1 euro, which has hit a new low in the past two years. Although the trend of the euro has picked up some time ago, the rash actions of the Germans still let the market smell the bad future of the euro. .

   Zhong Shi naturally wanted to seize this opportunity.

   "1.2340, release a spot of 100 million euros, and at the same time buy short options worth a total of 100 million euros in the forward market." As the opening sound approached, Zhongshi's order came soon.

   So far, Tianyu Fund has established a huge position in the euro spot market, with a total size of tens of billions of euros, and a similar size in short-term options. Now Tianyu Fund still has nearly 5 billion euros in cash on hand, and these funds are reserved for short-term operations.

  Traders quickly divided the labor, and soon this sell order appeared on the market.

  For the Asian market, the trading volume of the euro has increased significantly in these months, and it has become the third largest trading market. Because the euro has gradually become the reserve currency of many Asian countries, the transaction volume for them has also increased rapidly. In this case, in Hong Kong, Tokyo, Singapore and other places and Asian OTC markets, the transaction volume and The numbers are showing an explosive upward trend.

   "Mitsubishi Bank takes over!"

   Soon, the counterparty appeared, and a financial institution from Japan in the OTC market took over the sale order.

"interesting!"

  Zhong Shi's face remained unchanged, and he continued to order, "Another 100 million euros in stock will still be at the price just now. Let's see if they are still interested in continuing to take it?"

   Soon the results came out, and the Japanese were unwilling to continue to take over. They gave a choice to receive half of the funds at a lower price, otherwise they would not take the amount.

   "Continue to look for a counterparty!"

Because in the OTC market, the main counterparty’s trading method is through the telephone. When they reach a certain transaction, they will appear on the centralized trading platform, so when each transaction jumps out, the price is already reached. s price.

   "The price has dropped to 1.2338!"

  A trader with quick eyes and hands shouted loudly, "I don't know the parties to the transaction, but the amount is 10 million euros in spot, and the quantity is not very large."

   "1.2335, 200 million in stock, call now!"

   Realizing that the German news had begun to have an effect on the market, Zhongshi changed the price decisively, "Societe Generale, Bank of Italy, Deutsche Bank, these should be big buyers in the market, ask them what they mean!"

   "It was said over there, if it is 1.2333, they will take all the goods!"

  The feedback was almost at a rapid speed. The traders at Deutsche Bank seemed to have received some kind of instructions, and just asked about the amount on hand of Tianyu Fund, and directly gave them the price of the order.

   "Sell them!"

  Zhong Shi ordered without hesitation, "Also, tell them, I still have 300 million euros in stock here, and ask them if they want more?"

  The information of the transaction soon appeared on the OTC information platform. The price of 1.2333 for the transaction of 200 million euros not only refreshed the lowest price today, but also refreshed the amount of a single transaction.

   "They want it, but the price is 1.2331."

Soon, the results of the trader's negotiation came over, "It seems that they want to fortify every step of the way. So far, they have eaten 300 million to 500 million euros, and I am afraid they are far from reaching their target line. .”

"sold!"

  Zhong Shi didn't even frown, and ordered directly, "Tell them, I still have 500 million euros in stock here, and ask them if they want more?"

   It took a long time this time before the traders reported, "They want to see the market trend today before making a judgment!"

  Deutsche Bank realized that things were a bit bad, and chose to give up.

  But Zhong Shi doesn’t care. Losing one of their counterparties, there are still many counterparties in the market, including the central banks of various countries. He is not worried about not being able to sell euros.

However, due to the emergence of Tianyu Fund, a big seller, and the acceleration of the market's tightening of liquidity in the euro zone, the exchange rate of the euro to the dollar has shown a one-sided posture. Although there have been buyers in the process, the exchange rate is still falling. .

  The price quickly came to the 1.2250 position.

   "Tell the Bank of Thailand, the price of 1.2230, the spot price of 1 billion euros, if they don't agree, go to BOJ."

   At this time, the counterparty of Tianyu Fund was replaced by the Bank of Thailand. After completing several transactions one after another, Zhong Shi gradually began to make efforts, "I believe this price will make them quite satisfied!"

   "The Thais agreed!"

   Soon, the reply from the Thais came. As Zhongshi expected, the sharp reduction of 20 basis points made them realize that it was profitable.

But they regretted it the next moment, because this news appeared on the OTC market, which immediately caused a sensation in the entire market. The price of one basis point still scares them.

  At this time, Tianyu Fund is seizing the opportunity to attack everywhere to stabilize the results just obtained. This time, another 1 billion euros appeared on the market, and this scale instantly suppressed BOT's move to raise the euro.

  BOT would never have imagined that a fund would have such great energy that it could affect the trend of the euro in Asia.

  The price of the euro in the Asia-Pacific region began to fall in a straight line, and soon fell below the 1.2200 mark. After breaking through this mark, the decline did not slow down at all, and it was still falling into the abyss.

  1.2180, 1.2170, 1.2160… all the way to 1.2150.

   "Okay, now start the reverse operation!"

  The current price has fallen to a new low since April 2006. Seeing that it has reached expectations, Zhong Shi began to order traders to operate in the opposite direction, "Start buying now, and close our previous positions as soon as possible."

  Traders acted quickly, and Tianyu Fund started reverse buying while the market was still falling. Naturally, buying under these conditions was a very easy thing to do, and it didn't take long for many small purchases to appear on the market. In the initial period, Tianyu Fund took advantage of the market conversion space to absorb a large amount of spot.

   By the time the market reacted, Tianyu Fund had already closed nearly half of its positions, making a big profit.

   Thanks to the book friend alaphforce, rest assured that two copies, Xiao Shuili voted for the monthly ticket! Thanks to the book friend Three-legged Fork for the reward! It’s a rare opportunity for recommendation. I hope this book can come out of the tepid state. Of course, during this period, you also need the unremitting support of all book friends. Your support is the author’s greatest motivation. I hope more Book friends can actively vote for support, thank you~

  (end of this chapter)