"Oh, well, boss, the market situation looks great right now, is it a good time to short?"
Upon hearing Chen Dong's words, Henry exclaimed in surprise.
The market rallied across the board, with major financial sectors and real estate stocks among the heavyweights.
In this kind of market, it's good enough if you don't chase the rising prices.
To actually short sell at this time is like throwing good money after bad, a complete waste.
Does he think he has too much money?
"Has it been leveled yet?"
Chen Dong urged him again.
At this point, it was 1:36 PM.
The island nation's stock market will close at 2 PM Beijing time, leaving them with little time.
"We're sending instructions over there."
Henry was inwardly grumbling, but he didn't hesitate. He quickly operated the computer and immediately sent a closing order to the floor trader.
It also instructed floor traders to close out all 100 bullish contracts above the specified price.
10 lots.
30 lots.
......
"It's done, boss."
An order for 100 lots of closing contracts was placed, and it was snapped up in a few bites as soon as it was put up.
Not only that.
The index was further pushed up by the fierce bullish offensive, reaching a certain point.
And it fluctuates back and forth between —.
Stock index futures are essentially a zero-sum game.
Generally speaking.
"Falling" refers to closing out long positions in call contracts.
In the futures market, there are two ways for long positions to be closed out.
One approach is to place a buy order at a certain price level, waiting for the bulls below to buy up all your contracts.
Another option is to sell proactively.
Active selling is common in both the stock and futures markets.
The advantage of doing this is that it allows for a transaction to be completed in the shortest possible time.
Of course, the downsides are also obvious.
For example, there are 50 buy orders, 10 buy orders, and 45 buy orders.
Chen Dong has 100 bullish contracts. If he wants to complete the transaction quickly, he will use the active sell option.
Then the index will plummet to a certain point in an instant.
Chen Dong's actual profits on paper will also be greatly reduced during the active selling.
therefore!
Unless there are extreme market conditions and it's a race to the bottom, most contracts are closed out gradually using pending orders.
"Boss, the order volume is huge."
"Wangcai, how much money do we have in our account?"
"US$3,521,000."
Henry swallowed hard.
In half a day, the account balance increased from $2.3 million to $3.521 million, a profit of $1.221 million.
now.
The more than 3 million on the books may not be unrealized gains, but real cash.
If Chen Dong is willing, the money can be returned to his HSBC account and withdrawn at any time.
However, how could Chen Dong possibly give up the opportunity to ruthlessly annihilate the island nation?
$3.52 million?
This amount of money is still far from Chen Dong's goal.
His ultimate plan is to use the money he makes from the islanders to acquire their businesses.
During this period, Chen Dong was extremely envious of the semiconductor and electronics industries developed by the island nation.
If we don't act now, are we going to... let South Korea benefit from this?
$3.52 million seems like a lot.
At the current price level, this amount of money can only buy 161 standard lots of Nikkei 255 stock index futures contracts.
Of course, Chen Dong couldn't possibly spend all the money in his account at once.
Stock index futures, especially when leveraged by a hundredfold, can lead to incalculable losses if one is not careful.
so.
150 standard hands is currently the limit that Chen Dong can buy.
The index fluctuated slightly, but the funds in the account were enough to offset the unrealized losses.
Surely we can't let the exchange force us to liquidate our accounts?
Forced liquidation in the futures market does not mean closing out all contracts.
For example, Chen Dong placed an order for 150 standard lots of contracts, bearish.
The index he bought was at a certain point.
At this point, Chen Dong's account will show a floating loss in US dollars.
This is what is known as transaction tax, or channel fee.
If the index drops by 20 points, the account's unrealized losses will break even; only when the index continues to fall will you make a profit.
If the index rises instead of falling, each fluctuation in the Nikkei 255 index represents 5 points, which translates to US dollars.
When the unrealized loss reaches a certain percentage, the exchange has the right to liquidate the contracts in his account to ensure that the margin in the account is positive.
The minimum margin is calculated in US dollars per standard lot.
If Chen Dong's unrealized losses reach $200,000, 10 lots will be forcibly liquidated to ensure that the account margin is positive.
Stock index futures and the stock market are very different.
In the stock market, if you happen to buy a stock that is losing money, you can just leave it there and ignore it.
No one but yourself will touch your stocks.
Once the market recovers, losses can turn into profits.
The futures market is different.
You have 100 yuan, but you are managing funds of 10,000 yuan.
Of that, 9,900 yuan has nothing to do with you; it's just money the exchange lent you.
What truly concerns you is the 100 yuan you originally had.
Exchanges aren't charities; they won't reduce risk until you've lost all of your 100 yuan.
This is the origin of forced liquidation.
"Wangcai, immediately place an order for 150 standard lots of contracts, with the position opened above [the specified level]."
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