Chapter 634 Irreversible

"The price difference between London and New York currently fluctuates between 80 cents and 120 cents, and our contract is roughly divided in this range." Qi Xiao returned his latest achievements at a flying speed.

"That's the average of $1?"

"It's higher than this price, about $1.1. The price difference is more complicated. It takes more time to sell short and short the crude oil contracts between London and New York respectively. In addition, it takes up a lot of money..."

"Increase the leverage."

"Because it is a spread contract, we have put the leverage 100 times."

"It doesn't matter if the leverage of the price difference contract is 1000 times." Su Cheng said something casually.

"1000 times... this..., in fact, 100 times leverage is already a lot. When I came here, it was a margin of 200 million US dollars, and the spread was expanded by 10 cents, and there was a profit of almost 100 million US dollars, put it into 1,000 times..." Qi Xiao didn't know what to say, although he accepted many advanced Experience, but the Chinese people's understanding of risks in the 1990s is still conservative. It is enough to pry up 10 billion US dollars with 100 million US dollars. Prying up 100 billion US dollars is really a little beyond his psychological bottom line.

Even if he knew that there was a margin of 1000 times, Qi Xiao would not make such a decision.

Su Cheng is completely different. Although he has not received much financial guidance, in later oil finance activities, the price difference contract is the same as hedging, which is basically a compulsory course of petroleum finance. Any company involved in the import and export of crude oil needs to consider the price difference of crude oil. Although the current price difference between London and New York crude oil is only a little more than $1. But in the years of dozens of dollars of crude oil, the price difference between London and New York often reaches more than ten dollars. Price spread contracts have also become an important indicator because of the global flow of crude oil. Many financial institutions may not make crude oil futures, but will do spread contracts.

In addition to crude oil price spreads, cracking price spreads and other words, they are almost all questions that will be given in the exam. Even if Sucheng starts from experience, he will not be suspicious because of 100 times or 1000 times leverage.

But. In the years when crude oil price difference contracts are not popular, ordinary traders dare not use such a terrible leverage. After all, although such price difference contracts are theoretically impeccable, it still takes time to prove the real performance. A bank will not blindly bet hundreds or even thousands of times in millions of dollars for a profit. In case of any bug, it will cause a bank to fail.

The reason why Soros's quantum funds are famous is that they dare to use ultra-high leverage and use hedging methods such as spread contracts to eliminate risks. The mathematical model of long-term capital management companies that used to be high on Wall Street. You can also use tens of millions of dollars of capital to leverage hundreds of billions of dollars of the market.

However, for the financial community in 1994, these are a little too high-end. The price difference contract appeared in the market as early as the 1970s, but not until after 2000. Only then was it slowly recognized by large financial institutions, and Qi Xiao had to find some small and medium-sized financial merchants who were willing to do this transaction. In this way, he became more cautious.

Su Cheng recognized Qi Xiao's concern. This decision should be made by him. He smiled reassuringly and asked in a soothing voice, "What does the other party think? Did the price difference trader give advice?

Qi Xiao looked down at his feet and said, "They have a suggestion to use a higher lever."

"How much?"

"300 times to 500 times." Qi Xiao wiped his forehead and didn't sweat, but he felt that he should sweat.

"Then do as they say." It is difficult for Su Cheng to guess how much the spread contract can make. In the end, it also took a sound measure, although this is beyond Qi Xiao's affordability.

"Well, in this case, the scale of our spread contract will be between 60 billion and 100 billion US dollars. For every 10 cents of the spread between the two places, there will be a profit of 300 million to 600 million US dollars. If the spread is expanded to 1 US dollar, it will be 3 billion to 6 billion US dollars..." Qi Xiao said, He began to touch his forehead again and said gently, "If the price difference narrows, we will lose so much."

Whether it is 3 billion US dollars or 6 billion US dollars, it is difficult for Dahua Industry to bear now. They occupy the most shares in the Pan-Asian Fund. Once the price difference narrows a lot, the best result also means that Dahua Industry's trip is in vain. In a bad situation, Dahua Industry may have to lose money.

Qi Xiao's reminder also made Su Cheng realize the huge risk.

He nodded slowly and said, "The average price difference of the contract we bought is $1.1. I think the crude oil price difference between New York and London can't be reduced to zero, so don't have any burden and implement the rest of the contract well."

"Okay." Qi Xiao can only choose to feel at ease. Indeed, crude oil prices in New York and London can go up or down, but there is little possibility of reducing the price difference to zero. Maybe at some point, 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 sharp price changes, there are too few factors to narrow the price difference between the two. Spot traders will not travel all the way from London to transport the crude oil they need to the refineries in North America. Similarly, it is impossible for spot traders in the United States to choose suppliers in London because of the price difference of dozens of cents. The same is true for crude oil production companies. They have decided long ago which delivery warehouse to send crude oil, unless The price difference is so big that there are abundant profits, otherwise it will be difficult for them to change such a decision.

However, the world is unpredictable, especially in this kind of big-sized gambling. Those who are bankrupt have died on 13 "big" in a row. You can find the boss in the casino, and who can talk to the crude oil gambling transaction.

Su Cheng did not dare to say that the price difference of crude oil had narrowed, but this part of the information was inferred by him based on the known situation.

Before making inferences, Su Cheng thought a lot and prepared a lot. But now when I think about it again, I feel that I am not prepared enough. Lack of consideration, just like a student who is about to go to the examination room, there is always an inexplicable nervous.

"Bend me all today's newspapers. The big newspapers, as well as the evening newspapers, will be delivered immediately. Su Cheng put his worries behind and told Yang Ming after Qi Xiao went out.

At this time. It's 5:30 p.m.

There are still two hours before the end of the manual price, and five hours before the end of the electronic price. If it is a normal day, the oil price should be ready to rise slowly, because many customers are unwilling to hold the contract for the night. They would rather earn less and close their positions before the daily trading deadline. Then re-select the route after tomorrow's trading day, and some profitable and cautious customers will also choose the same.

Only Su Cheng sees this day longer than a week, or he actually doesn't want to spend the night, so as not to have anything uncontrollable.

Yang Ming agreed. Ask: "Is it all newspapers or financial?"

"It's mainly finance and economics. If the Daily Telegraph is like this, the Sun doesn't have to send it." The Daily Telegraph is the serious newspaper with the largest circulation in the UK, and the Sun is the pornographic newspaper with the largest circulation in the UK. It is also the largest newspaper in the UK. Su Cheng said and looked at his watch and said, "The time difference between London and Tokyo is 9 hours, right? Find some more Japanese newspapers. Let's see what they say and translate the title first.

"Are you waiting for the latest news?"

"Hmm."

"The Daily Telegraph seems to have an electronic newspaper. It is said that there is real-time news. I'll ask."

"Wait a minute." Su Cheng stared and asked, "What is an electronic newspaper?"

"It seems to be called the World Wide Web. You can see it on the computer. There are daily headlines of the Daily Telegraph, as well as the latest news." Yang Ming is in charge of Su Cheng's office. On the one hand, he is doing the work of uploading and distributing, and on the other hand, he is collecting information. He knows that Su Cheng is very interested in computer technology, so he specially understands this information.

Su Cheng fell into a deep nostalgia. For college students in later generations, life without the Internet is unimaginable. At first, he also missed the Internet. Originally, I thought it would take a few years to watch some outdated news on the Internet with kittens, but I didn't expect that the British media was so advanced, and it still favored the Conservative Daily Telegraph.

"Su Dong?"

Su Cheng woke up like a dream: "Find someone, let me see this website."

After a while, the staff came up to install and debug the computer for Sucheng.

On the spherical 15-inch display, the website of the Daily Telegraph flashed, using the IBm webexplorer browser in the Middle Ages, which simply made Sucheng unbearable.

I don't know whether it is IBm's dispatcher or the IT staff of the London International Petroleum Exchange. While operating the keyboard, he explained to Sioux City in detail: "We are now using IBm's os/2 system. The software you see is IBm's browser. In addition to the hTmL3 it Integrate mail and news. With just a few small steps, you can see the Daily Telegraph website you want.

"Integrating mail and news functions? So awesome?" Su Cheng looked at the IT man in front of him with sad eyes and was completely insensitive to his excitement.

The IT man smiled and looked at Su Cheng with pitiful eyes. He thought proudly: He should faint now. I guess he doesn't even know what the browser is.

Sure enough, Su Cheng said in English, "Come and help me operate it. I want to watch today's news."

Su Cheng is completely insensitive to this heavy and dull IBm computer.

IT men operate the computer happily and feel the pulse of technology.

"Tell me if you have any news." Su Cheng read today's new news, and there is nothing worth paying attention to.

The IT man naturally said, "Whenever you want to see new news, you can click this key to refresh..."

"You can operate it. Click later and let me know if there is any new news." Su Cheng pushed away the chair and sat on the sofa to read the newspaper.

The IT man had to sit stupidly and refresh the page.

I don't know how long it took, a news suddenly poped up.

"There is new news." The IT man's voice is as dull as shopping with his wife.

"What's the content?" Su Cheng is still sweeping the newspaper.

"Azerbaijan announced that it will not reduce production... Barabbalah... Kazakhstan will continue to build its own oil fields... OPEC will not be able to reach a production reduction agreement in the short term, and the crisis of oversupply in the crude oil market will be further fermented..."

"Show me." Su Cheng bounced up from the sofa and flew to the 15-inch spherical monitor.

Today's website is more simple than the blog Weibo of later generations, but the text is very clear.

It's really the Daily Telegraph-style news.

Su Cheng swept over at a glance. When he saw half of it, he grabbed the phone and said in a low voice, "Prepare the s plan, contact Aliyev, confirm the bad news, and execute it immediately."

The

s plan is exactly the best result that Sucheng is waiting for. If Azerbaijan and Kazakhstan continue to increase production, and OPEC cannot give an appropriate plan, no matter how the market interprets it, a crude oil surplus will be formed in the short term.

The outcome of the continued decline of crude oil will be irreversible.

With OPEC's consistent efficiency, the time required to give a plan should be calculated in at least a week.

Convince the oil ministers of 12 countries and the leaders of 12 countries that it is difficult to draw quick conclusions even in emergency situations.

... (To be continued. If you like this work, you are welcome to vote for recommendation and monthly tickets. Your support is my greatest motivation. Mobile phone users, please go to m. Reading.) RT