Even though Chen Dong knew the exact location, he still felt a chill run down his spine.
A leverage ratio of 100 is no joke; not everyone can afford it.
Every fluctuation in the index represents a floating profit or loss in the US dollar.
His $2 million in funds could only withstand 61 fluctuations.
To be precise, it was 56 beats.
Because when you buy stock index futures, regardless of whether you are bullish or bearish, the actual transaction price will fluctuate up or down five times.
In other words, the exchange takes the transaction fees upfront as soon as you buy in.
Therefore, if the index fluctuates more than 280 points in the opposite direction on that day, Chen Dong's account will face liquidation.
All the wealth vanished into thin air.
These are just theoretical values.
In practice, leveraged trading always has warning lines, liquidation lines, and forced liquidation lines.
When the warning line is reached, the exchange will call you and ask you to add margin.
When the margin risk level exceeds 120%, you will receive a forced liquidation notification; when the margin risk level exceeds 140%, you will be forced to liquidate your position.
Unless there are extreme market conditions that prevent even forced liquidation, then the only option left is margin call.
Therefore, Chen Dong only had 20 opportunities to fluctuate.
Simply put
Chen Dong bought short positions in stock index futures. As long as the Nikkei 255 index rises by 100 points, it will reach the warning line.
Throughout June, the bulls and bears were locked in fierce battle, and it was perfectly normal for the Nikkei index to fluctuate by several hundred points.
To avoid becoming cannon fodder, establishing a good position is key!
As for the island nation, being besieged by capital from various countries, its defeat was inevitable.
Chen Dong didn't want to be so close to success, only to have his hopes dashed at the last minute; that would be a true case of extreme joy turning to sorrow.
From the perspective of the victor, the process is also quite simple.
......
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