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- "The price difference between London and New York currently fluctuates between 80 cents and 120 cents, and our contracts are roughly within this range." Qi Xiao reported his latest achievements at a flying speed.
¡°That¡¯s an average of $1?¡±
"It's higher than this price, about 1.1 US dollars. The price difference is more complicated to make. You have to short-sell and short-sell the crude oil contracts in London and New York respectively, which takes a lot of time. In addition, it takes up a lot of funds"
¡°Increase the leverage.¡±
"Because it is a CFD contract, we have increased the leverage to 100 times."
¡°It doesn¡¯t matter if the leverage of the CFD contract is 1,000 times.¡± Su Cheng said casually.
"1,000 times this, actually 100 times leverage is already a lot. When I came here, the margin was 200 million US dollars. If the spread increased by 10 cents, there would be a profit of almost 100 million US dollars. If you put it at 1,000 times " Qi Xiao didn't know what to say. Although they had received a lot of advanced experience, Chinese people in the 1990s still tended to have a conservative understanding of risks. Using 100 million U.S. dollars to raise 10 billion U.S. dollars was enough to scare people. Jumping and leveraging 100 billion US dollars is really beyond his psychological bottom line.
Even if he knew that 1,000 times the spread leverage existed, Qi Xiao would still not make such a decision.
Su Cheng is completely different. Although he did not receive much financial guidance, in later oil financial activities, contracts for differences, like hedging, are basically required courses in oil finance. Any company involved in the import and export of crude oil needs to consider the issue of crude oil price differences. Although the current price difference between London and New York crude oil is only a little over 1 US dollar, in the years when crude oil was tens of US dollars, the price difference between London and New York often reached more than ten US dollars. CFD contracts are also due to the global flow of crude oil. , has become an important indicator. Many financial institutions may not do crude oil futures, but they will do CFDs.
With the exception of vocabulary such as crude oil price difference and cracked price difference, these are almost all questions that will be asked in the exam. Even if Sioux City is based on experience, he will not be worried about 100 times or 1,000 times leverage.
However, in the years when crude oil CFD contracts were not yet popular, ordinary traders did not dare to use such terrifying leverage. After all, although such a CFD contract is impeccable in theory, it still takes time to determine its actual performance. prove. A bank will not blindly invest hundreds or even thousands of times of capital in order to make millions of dollars in profits. If there is any bug, the amount of funds will cause a bank to fail.
The reason why Soros's Quantum Fund is famous is that they dare to use ultra-high leverage and use hedging techniques such as contracts for difference to eliminate risks. The mathematical model of Long-term Capital Management, which once ranked high on Wall Street, can also use several Tens of millions of dollars in capital to leverage a market worth hundreds of billions of dollars.
However, for the financial world in 1994, these were a bit too high-end. CFDs appeared in the market as early as the 1970s, but it was not until 2000 that they were gradually recognized by large financial institutions. Qi Xiao had to find some small and medium-sized financial institutions willing to do this transaction. In this way, he Appearing more cautious.
Su Cheng recognized Qi Xiao¡¯s concerns and this decision should be made by him. He asked with a reassuring smile and a soothing voice: "What does the other party think? Did the spread trader give advice?"
Qi Xiao looked down at his feet and said, "They have suggested using higher leverage."
"How many?"
"300 times to 500 times." Qi Xiao wiped his forehead. There was no sweat, but he felt that he should sweat.
"Then just follow what they said." It was difficult for Su Cheng to guess how much he could earn from the CFD contract, and in the end he took prudent measures, although this was beyond Qi Xiao's ability to bear.
"Well, in this case, the size of our price difference contracts will be 60 billion to 100 billion US dollars. Every time the price difference between the two places expands by 10 cents, there will be a profit of 300 million to 600 million US dollars. If the price difference expands to 1 In U.S. dollars, it's between 3 billion and 6 billion U.S. dollars" Qi Xiao said, and began to touch his forehead again, and at the same time said softly: "If the price difference narrows, we will lose so much."
Whether it is US$3 billion or US$6 billion, it is difficult for Dahua Industrial to afford it now. They hold the largest share in the Pan-Asia Fund. Once the price difference narrows more, the best result will also mean that Dahua Industrial Dahua Industrial's trip was in vain. In the worst case, Dahua Industrial might have to pay for it.
Qi Xiao¡¯s reminder also made Su Cheng aware of the huge risks.
He nodded slowly and said: "The average price difference of the contracts we purchased is 1.1 U.S. dollars. Come to think of it, the price difference between crude oil prices in New York and London cannot return to zero. So, don't be burdened and use the rest." The contract must be properly implemented.¡±
"OK."Qi Xiao can only choose peace of mind. It is true that crude oil prices in New York and London can go up or down, but there is almost no possibility of narrowing the price difference to zero. Maybe at a certain moment, the price of the two will be the same, but most of the time, there will always be a price difference between the two.
Especially in this range of violent price changes, there are too few factors to narrow the price difference between the two. Spot merchants will not transport the crude oil they need all the way from London to refineries in North America. Similarly, spot merchants in the United States will not choose suppliers and crude oil production companies in London just because of a price difference of tens of cents. Likewise, they would have decided which delivery warehouse to send the crude oil to a long time ago. Unless the price difference is so large that there is ample profit, it will be difficult for them to change this decision.
"However, things are unpredictable, especially in this kind of gambling, big and small. People who have lost all their money have died by opening 13 "big" hands in a row. You can go to the boss in the casino, and who can you go to to explain the crude oil betting transaction.
Su Cheng did not dare to say with certainty that the price difference of crude oil had narrowed. However, this part of the information was inferred by him based on the known situation.
Before making the inference, Su Cheng thought a lot and prepared a lot, but now that he thinks about it again, he feels that he is not prepared enough and has not considered enough, just like a student who is about to go to the examination room, there is always an unexplainable uneasiness.
"Send me all today's newspapers. Those from major newspapers and evening newspapers. Send the new ones immediately." Su Cheng put his worries behind and gave Yang Ming instructions after Qi Xiao went out. A sound.
At this time, it is 5:30 in the afternoon.
There are still two hours until the manual bidding ends, and five hours until the electronic bidding ends. If it is a normal day, oil prices should be prepared to rise slowly, because many customers are not willing to hold the contract overnight. They would rather If you make a little less, you will close your position before the daily trading deadline, and then choose a new route after the start of tomorrow's trading day. Some profitable and cautious customers will also choose this way.
Only Su Cheng saw this day as longer than a week, or in other words, he actually didn¡¯t want to stay overnight in case something uncontrollable happened again.
Yang Ming agreed and asked: "Is it all newspapers, or financial ones?"
"Mainly financial ones. I also want ones like the Daily Telegraph. There is no need to send the Sun." The Daily Telegraph is the most serious newspaper with the largest circulation in the UK, and the Sun is the S with the largest circulation in the UK. It is also the largest circulation newspaper in the UK. As he spoke, Su Cheng looked at his watch again and said, "The time difference between London and Tokyo is nine hours, right? Find some Japanese newspapers and see what they say. Translate the titles first."
"Are you waiting for the latest news?"
"Um."
"The Daily Telegraph seems to have an electronic newspaper. It is said to have real-time news. I'll go ask."
"Wait a minute." Su Cheng widened his eyes and asked, "What is an electronic newspaper?"
"It seems to be called the World Wide Web. You can see it on your computer. It has the daily front page headlines of the Daily Telegraph, as well as the latest news." Yang Ming is in charge of the office in Su City, and on the one hand he is doing the work of uploading and distributing information. , on the other hand, is to collect information. He knew that Su Cheng was very interested in computer technology, so he deliberately learned about this information.
Su Cheng, however, fell into deep nostalgia. For future generations of college students, life without the Internet is unimaginable. He was also obsessed with the Internet at first. I originally thought that it would take a few years before I could use a kitten to read outdated news online, but I didn¡¯t expect that the British media was so advanced, and it still favored the Conservative Party¡¯s Daily Telegraph.
"Dong Su?"
Su Cheng woke up from a dream: "Find someone to show me this website."
After a while, staff came up to install and debug computers in Suzhou.
On the spherical 15-inch monitor, the website of the Daily Telegraph flickered out, using IBM's WebExplorer browser from the Middle Ages. It was so simple that Sioux City couldn't bear to see it.
I don¡¯t know whether it was a dispatcher from IBM or an IT staff member from the London International Petroleum Exchange. While operating the keyboard, he explained to Su Cheng in detail: ¡°We are using IBM¡¯s OS/2 system now, and the software you see is from IBM. In addition to supporting HTML3, the most powerful thing about the browser is that it integrates email and news. With just a few simple steps, you can see the Daily Telegraph website you want."
"Integrated email and news functions? So powerful?" Su Cheng looked at the IT man in front of him with sad eyes, completely indifferent to his excitement.
The IT man smiled back, looked at Su Cheng with pitiful eyes, and thought proudly: He should have passed out now, he probably doesn¡¯t even know what a browser is.
Sure enough, Su Cheng said in English: "Come and help me, I want to read today's news."
Sioux City was completely indifferent to this bulky and slow IBM computer.
The IT man is happily operating the computer and feeling the pulse of technology.
"Tell me if you have any new news." Su Cheng looked at today's new news and found nothing worth paying attention to.
The IT man said naturally: "Whenever you want to see new news, just click this button to refresh"
"You do it. After a while, click and tell me any new news." Su Cheng pushed the chair away and sat on the sofa to read the newspaper.
The IT man had no choice but to sit there and refresh the page.
I don¡¯t know how long it took, but a piece of news suddenly popped up.
"There's new news." The IT man's voice sounded dull, as if he was going shopping with his wife.
"What's the content?" Su Cheng was still scanning the newspaper.
¡°Azerbaijan announced that it will not reduce production Barabala¡ Kazakhstan will continue to build its own oil fields¡ OPEC will not be able to reach an agreement to reduce production in the short term, and the crisis of oversupply in the crude oil market will further ferment¡¡±
"Show me." Su Cheng seemed to bounce up from the sofa and flew to the 15-inch spherical monitor.
Today¡¯s website is simpler than the blogs and Weibo of later generations, but the text is very clear.
It¡¯s indeed Daily Telegraph style news.
Su Cheng glanced over at a glance, and after seeing half of it, he grabbed the phone and said in a deep voice: "Prepare plan S, contact Aliyev, and implement it immediately if the bad news is confirmed."
Plan S is the best result Sioux City is waiting for. If Azerbaijan and Kazakhstan continue to increase production and OPEC cannot come up with an appropriate plan, no matter how the market interprets it, a crude oil surplus will form in the short term.
The outcome of crude oil¡¯s continued decline will be irreversible.
With OPEC¡¯s consistent efficiency, the time required to come up with a plan must be calculated in weeks at least.
¡° To convince the oil ministers of 12 countries, and then convince the leaders of 12 countries, even in the most urgent situation, it is difficult to draw a quick conclusion.
¡(To be continued. Please search Piaotian Literature, the novels will be better and updated faster!) - Didn't finish reading? Add this book to your favoritesI'm a member and bookmarked this chapterCopy the address of this book and recommend it to your friends for pointsChapter error? Click here to report
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