The futures market in the second half of 2018 was wonderful.First of all, because of the general economic trend and sweater war, major futures except for gold have fallen.Then there is international crude oil.International crude oil hit a four-year high on October 3, 2018 after the upward momentum came to an abrupt end, Abel recalled the end of September and early October Asian Petroleum Conference (AAPEC) major traders have indicated that the supply is tight, Brent 90 is a small target, 100 is not a dream rhetoric, as if people have been a world away............
But it doesn't matter.There are still many people who believe that the decline in international crude oil in the past half a month or so is just a self-adjustment of the market.Just like the many previous adjustments in the market, even if the price has dropped so many times, the price of international crude oil is still above $70.Can it still fall to the previous forty or fifty dollars?
You see, it's been three days of continuous rising, okay?!
Originally.When international oil futures were first born.It is a means of hedging.The oil crisis that occurred in the early 70s of the 20th century had a huge impact on the world oil market, and oil prices fluctuated violently, which directly led to the emergence of oil futures.Since the birth of oil futures, its trading volume has been showing a rapid growth trend, which has surpassed metal futures and is an important part of the international futures market.There are four important crude oil futures contracts in the world, namely the New York Mercantile Futures Contract, the Singapore Acid Crude Oil Futures Contract, the Dongxjing Industrial Products Contract and the Brent Crude Oil Futures Contract in the United Kingdom.In fact, the original purpose of futures was hedging.Enterprises can achieve risk procurement through hedging, which can keep production and operation costs or expected profits relatively stable, thereby enhancing the ability of enterprises to resist market price risks.The basic practice of hedging is that a company buys or sells oil commodity futures contracts that are equivalent to the number traded in the spot market, but in the opposite direction, in order to offset the actual price risk caused by price changes in the spot market at some point in the future by means of hedging or liquidation compensation.Of course, due to the objective existence of the difference between spot prices and futures prices, hedging cannot completely eliminate risks, but replace a larger risk with a smaller risk, and replace the risk of spot price changes with the risk of difference between spot prices and futures prices.However, capital has a natural speculative need.Using the futures market, traders can avoid the negative impact of international oil price fluctuations on the one hand; On the other hand, it is also possible to obtain more benefits from market price fluctuations through speculative trading.After so many years of development.International crude oil, like other futures, has long evolved from a means of hedging to a battlefield of capital games.To put it simply.International crude oil has also become the same as other futures or foreign exchange markets.It has become a kind of intermediary between international capital.October 24, 2018.After three consecutive days of rising.New York International Oil Futures A barrel of international crude oil is now priced at $71.67.It is at this moment.Abel threw $10 billion in margin to the market, requiring a long-term trading bet with a leverage ratio of at least five times.To put it simply, he threw out $10 billion, using the $10 billion as a margin, and bet against players in the international futures market who have the strength to take such orders, and he bet that the international crude oil market will continue to fall in the future.According to his request, his funds will be enlarged into an international crude oil order of 50 billion US dollars.If someone takes over the order, it will be at today's price of $71.67, and if this price rises, Abel will have to rise and lose on the basis of $71.67.If the price of international crude oil falls.So on the basis of the price of 71.67 US dollars, the amount of a barrel falling will be relatively profitable.Because margin trading is used.Under the high-risk leverage multiple, as long as the international crude oil rises above $80, his $10 billion margin base will be lost.Even if it only rises above $75.With his $10 billion margin, his loss will be at least more than 30%!
The $10 billion margin was expanded fivefold to become a $50 billion order.If you convert the specific number of oil futures, this is close to 700 million barrels of international standard New York oil.To put it simply, it is a CFD contract with a large amount and a large amount!
The list is too big.After he was thrown into the international futures market, no one reacted for a long time.Unlike the eerie forex market, the futures market is much more reactive.But this 10 billion funds.It's like a fragrant bait, there will always be a big fish that smells it and comes to the door.Don't say anything else.Even Wells Fargo, which has a good relationship with Abel, was hooked by this tempting $10 billion.A few floors away from Abel, in the office of one of the top West Coast leaders of Wells Fargo.Alpha smiled wryly and put down the phone.Opposite him was John Mellon and the few remaining Wells Fargo West Coast executives.It's night.It has been four hours since Abel released the 10 billion contracts to the international futures market."
Timothy M.
Mr.
J.
Sloan, I hope we can eat some of Mr.
Sephorosa's big 10 billion orders!
”"What do you guys think?!"
Everyone looked at each other.To be honest, many of the conditions contained in such large-scale long-term VAM futures contracts are often beneficial to banks and large financial institutions.For example, Abel's contract this time.First of all, the $10 billion contract can be divided into several small parts, and Wells Fargo can choose to eat a part of it, $2.5 billion, $3 billion, or $1 billion.Then the handover period of the contract is one month later.That is to say, if Abel makes a profit and he asks to close the position, he must have a one-month contract handover period.But if he loses money, as long as he falls below the safety line of the margin, he does not have to wait for the handover period of this month, his margin will be withdrawn by the bank and the position will be liquidated.If Wells Fargo eats some of Abel's orders this time.As long as the price of international crude oil can rise above $76.Wells Fargo won the bet.Abel's margin was about to be partially closed by Wells Fargo.Other banks that took note of the scented bait were too."
John, what do you think?"
Alpha's head ached as he looked at John Mellon, who was most likely to succeed him on the West Coast."
What do I think?"
John Mellon groaned, "I personally recommend that we not take orders.But we can act as a third-party guarantee for a certain amount of interest and service charges.Just like so many previous collaborations!
”Don't eat it?
Alpha pondered.