Reborn Wealth America

The futures market in the second half of 2018 is very exciting.

First, due to the general economic situation and the sweater war, all major futures, except for gold, fell one after another.

Then there is international crude oil.

After international crude oil hit a 4-year high on October 3, 2018, the upward momentum came to a halt. Abel recalled that at the end of September and early October, major traders at the Asian Petroleum Conference (AAPEC) indicated that the supply was tightening. Brent 90 was The small goal, 100 is not a dream rhetoric, it seems like a world away............

But it doesn't matter.

There are still many people who believe that the decline in international crude oil over the past half month 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 more than $70.

Can it fall to the previous forty or fifty dollars?

You see, this has been rising for three consecutive days, okay?!

Originally.

When international oil futures were first born.

It is a means of hedging.

The oil crisis that occurred in the early 1970s had a huge impact on the world oil market. The violent fluctuation of oil prices directly led to the creation of oil futures.

Since the birth of oil futures, its trading volume has been showing a trend of rapid growth, which has surpassed that of metal futures and is an important part of the international futures market.

There are 4 important crude oil futures contracts in the world, namely the New York Mercantile Futures Contract, Singapore Sour Crude Oil Futures Contract, Dongxjing Industrial Products and the British Brent crude oil futures contract.

In fact, the original purpose of futures is to hedge.Enterprises realize risky procurement through hedging, which can keep production and operation costs or expected profits relatively stable, thereby enhancing their ability to withstand market price risks.

The basic method of hedging is that the company buys or sells oil commodity futures contracts that are equal in volume to the spot market but trade in the opposite direction, in order to offset changes in spot market prices through hedging or liquidation compensation at some point in the future The actual price risk caused.

Of course, due to the objective existence of the difference between spot prices and futures prices, hedging cannot completely eliminate risks. Instead, a smaller risk replaces a larger risk, and the difference between spot prices and futures prices replaces spot risks. Risk of price changes.

However, capital has a natural speculative demand.Using the futures market, traders can avoid the negative impact of international oil price fluctuations on the one hand; on the other hand, they can also obtain more benefits from market price fluctuations through speculative trading.

After so many years of development.

Like other futures, international crude oil has gradually evolved from a means of hedging to a battlefield of capital games.

simply put.

International crude oil has also become the same as other futures or foreign exchange markets.

It has become an intermediary for game-to-gambling among international capital.

October 24, 2018.

After three consecutive days of rising.

The current price of a barrel of international crude oil in New York International Petroleum Futures is: US$71.67.

It is at this moment.

Abel threw a $10 billion deposit to the market and required a long-term trading pair betting order with a leverage of at least five times.

To put it simply, he has thrown out 10 billion US dollars and used the 10 billion US dollars as a margin to bet against players who are capable of taking such orders in the international futures market. He is betting that the international crude oil market will continue to fall in the future.

According to his request, his funds will be enlarged to an international crude oil list of US$50 billion.

If someone took the order, it would be based on today's price of $71.67. If the price went up, Abel would have lost as much as the price of $71.67.

If the price of international crude oil falls.

So based on the price of US$71.67, he will make a lot of money relative to his order as much as a barrel falls.

Because it uses margin trading.

Under high-risk leverage, as long as the international crude oil rises above US$80, his 10 billion US dollar margin base will be exhausted.

Even if it only rises above $75.

His 10 billion US dollars of margin, his loss will be more than 30%!

The margin of 10 billion US dollars has been expanded five times to become a 50 billion order.If you convert the specific amount of oil futures, this is the international standard New York oil close to 700 million barrels.

Simply put, it is a cfd contract with a large amount and a large number!

This list is too big.

After he was thrown on the international futures market, no one responded for a long time.

Unlike the turbulent foreign exchange market, the reaction of the futures market is much slower.

But this 10 billion fund.

Just like a fragrant bait, there will always be a big fish smelling it and coming to the door.

Don't say anything else.

Even Wells Fargo, which has a good relationship with Abel, was caught in the eye of this attractive 10 billion US dollars.

In the office of one of the top leaders on the West Coast of Wells Fargo Bank, several floors away from Abel.

Alpha put down the phone with a wry smile.

Opposite him are John Mellon and the remaining West Coast executives of Wells Fargo.

It's night now.

Four hours have passed since Abel released the 10 billion contract to the international futures market.

"Mr. Timothy J. Sloan, I hope we can eat part of Mr. Sefrosa's 10 billion bill!"

"What do you think?!"

Everyone looked at each other.

To be honest, this large-scale long-term gambling futures contract, with many conditions contained in the contract, is often beneficial to banks and those large financial institutions.

For example, Abel's contract this time.

First of all, the 10 billion US dollar contract can be divided into several small parts, and Wells Fargo can choose to eat a part of it, 2.5 billion US dollars, 3 billion US dollars, or 1 billion US dollars.

Then the deadline for the delivery of the contract is one month later.In other words, 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, without waiting for this one-month handover period, his margin will be withdrawn by the bank and the position will be liquidated.

If Wells Fargo took part of Abel's order this time.

As long as the price of international crude oil can rise above US$76.

Wells Fargo even won the bet.

Abel's deposit will be partly collected by Wells Fargo Bank.

Other banks who noticed this fragrant bait too.

"John, what do you think?" Alpha looked at the West Coast area with a sore head, and Wells Fargo was most likely to succeed John Mellon in his class.

"What do I think?" John Mellon pondered, "I personally suggest that we do not take orders. But we can act as a third-party guarantee and charge a certain amount of interest and service fees. Just like so many previous cooperations! "

Don't you eat it?

Alpha thought about it.