Chapter 193 Prisoner Model

  November 15th, Tuesday, the opening price of copper was at 2747 US dollars, and then the price began to rise slowly, and the price had risen to 2760 US dollars near noon.

   "How is the situation in the morning?" After finishing the morning's operation, Zhong Shi looked at the traders who were all slumped on the sofa chairs, and asked with a bit of mischief.

  The four of them just hummed, they were too tired to speak at all. After a long time, Lu Xisheng straightened up reluctantly, and replied weakly: "Zhong Sheng, the market in the morning is really too complicated. We managed to establish a long position of 2,500 lots. 2,500 low positions were sold out. When I listened to your orders before, I felt that trading was nothing more than that, but now it seems that it is indeed not the case."

  Hearing what he said, the other three traders nodded, obviously agreeing with what he said.

  Different from usual, Zhong Shi let them operate today with a limit of 5,000 lots, which is a transaction of 50 million US dollars, which made several traders tremble with fear. Even though they had already discussed the strategies yesterday, when they arrived in the market, they really discovered that the strategies they formulated could not keep up with the changes in the market at all. Just when they thought they could control the price within the established range, a large amount of buying orders suddenly appeared, which instantly pushed the price of copper futures to $2,770. At that time, they reacted quickly and directly sold Only 1,000 lots of closing orders barely brought the price back to $2,750.

  Thinking about it now, a few people are still a little terrified, because once the price breaks through 2,780 US dollars, all their strategies will be invalid.

"In fact, you have done a good job. You not only implemented the original strategy, but also successfully responded to the unexpected situation in the market. If I guessed correctly, the pull-up in the morning should have been the opportunity of a certain bull to sell Rhythm, if you didn’t forcefully suppress their rising momentum, the price should break through 2,780 US dollars.” Although it was agreed to let these traders operate, Zhong Shi and Andrew still watched from the sidelines and made a few remarks from time to time .

   "Then according to Mr. Zhong's opinion, what will happen to the market in the afternoon?" Several traders were stunned, and it took a long time to recover. Among them, Zhao Shangming, who seemed more clever, took the opportunity to ask.

Zhong Shi and Andrew glanced at each other and smiled at the same time. He stroked his smooth chin and said in an irrelevant way: "According to the sudden rise in the morning, the number of lots bought by the longs should be higher than the one you entrusted." The number of lots, so there was a sudden surge on the market. But later, after you closed more than 1,000 lots, they had no strength to continue to attack for a while, and the shorts saw the right time, and the price of copper futures slowed down. When the price of copper fell to 2,740 US dollars, the price was quickly supported. Of course, there are reasons for your low price absorption, but more importantly, the market There is another strong support of bulls at the low level, otherwise the price of copper futures will definitely fall below $2,740."

The four traders looked at each other in blank dismay. They had no idea that there were so many ways to go about the fleeting market. After all, they only looked at the peaks and valleys of a certain wave, and they did not pay attention to the bottom and peak changes. Inside.

  In fact, people who pay attention to peaks and troughs are often people who have the ability to turn the market around, and Zhongshi is just such a person.

  Zhao Shangming lowered his head and thought about it, and after a long time, he suddenly said: "Mr. Zhong, you haven't said how to operate in the afternoon?"

Zhong Shi was speechless for a while, and after a long pause, he patiently explained: "You still don't understand this? Since there are multiple bulls in the low position, then you can go long boldly and operate according to the original strategy." .”

   "What about the bulls who are pulling up? Could it be that they are with the bulls who are supporting at a low position?" Zhao Shangming still asked reluctantly.

"It may be, or it may not be." Zhong Shi thought for a while, and gave a plausible answer, "I don't understand the intention of the bulls who are pulling up, and they have many possibilities. It depends on the follow-up operations. But yes The low support is real, if you don’t believe it, you can try to test them by throwing out a large amount of liquidation orders after the market opens in the afternoon!”

   "Exploring?" The attention of the four traders was attracted, and Ampite scratched his head and asked a little puzzled.

"Opening in the afternoon, the price is around $2,750. If you sell 2,000 lots of liquidation orders in the market at once, the price will inevitably drop suddenly, and the intention of the other bulls will be self-evident. If you are operating two long stocks, then one of them must react, because if they do not act, the pull up in the morning will be in vain. At that time, what will be left for them is only thousands of long positions at high positions .And if a stock is long, it is very likely that it will not choose, and when the time comes, the shorts will take the opportunity to attack, and it is very likely that they will regain the gains of the past two days."

   "So, the market in the afternoon is bound to fall?" Ampite rolled his eyes and came to such a simple conclusion.

Zhong Shi laughed dumbfounded, and then explained quite speechlessly: "There are various possibilities in the market. In fact, sometimes the contest is the contest of people's hearts. I don't know if you have studied game theory. There is a classic example, which is the prisoner's dilemma. That is Two prisoners are held in different cells, and they can choose their optimal strategy through different conditions, and this optimal strategy is to confess."

"Game theory? I've heard some of it. It seems that an economist in Princeton has a special book. Is this also related to our futures operations?" Zhou Shijie, the most educated among the four traders, frowned and thought for a while. After a long time He said with some uncertainty.

"The current situation is somewhat similar to the prisoner model, that is, our force chooses to cooperate with other bulls, which may produce a balanced result, which is optimal for all parties. And choose to 'punish' another participant, Although it will be detrimental to both parties once or twice, in the repeated prisoner's dilemma, the two parties will eventually cooperate because of this "punishment". Choosing the optimal strategy in the situation is the application of game theory to futures. Of course, if we operate with full positions, we can completely ignore other market participants and be the only one who makes decisions, and there will be no game at that time. Zhong Shi shook his head slightly, and said quite proudly.

  The game mentioned here is naturally a game between people who are in the same direction as him. And with his current amount of funds, he is indeed qualified to say such a thing, and in addition to these funds, he has also reserved a back move, which I believe will definitely give the market a big surprise.

"In this case, let's try to test other people's reactions in the afternoon." Seeing the proud expression on Zhong Shi's face, several traders felt confident again. They looked at each other and made up their minds. Operate according to the temptation that Zhong Shi said.

  …

  As soon as the market opened in the afternoon, a large amount of long liquidation orders appeared in the market immediately. These sales orders appeared in the market, which immediately caused a violent reaction from the market. The longs immediately found it easy to buy contracts, which made them start to worry about gains and losses, while the shorts found that the price of copper futures fell one after another, and even fell below two or three dollars within a minute. But one after another lost no time in opening new short positions here.

   Soon, the price of copper futures fell to the position of 2740 US dollars. Unsurprisingly, these closing orders met strong buying orders here, and they were traded in the form of long exchanges. The price of copper futures was firmly nailed at 2740 US dollars. After hovering for a period of time, it began to attack and turned to attack upwards.

The trading volume reached the maximum of the day at $2,745, where the short positions that had originally opened positions began to close one after another, and the long positions and the follow-up orders that reacted also sold out their old positions here in order to release more funds to open positions. New positions, both sides have done a large-scale unwinding here.

  Afterwards, the copper price started to rise again, but this time the rising speed was much slower than the sharp rise in the morning. It was not until the last closing time that the copper futures price rose to 2758 US dollars, which was only 18 US dollars higher than the opening price.

  …

Carl Fund, after opening another 1,000 short positions at $2,740, they have successfully raised the average price of opening positions to $2,720, and now they are losing $950 per contract, and $1.9 million for all positions. That unnerved some traders.

   "Carl, are we considering reducing some positions?" Jerry asked worriedly after the market closed.

  Carl's face was calm, and he couldn't see any emotional fluctuations, as if it wasn't his fund that lost money. After hearing Jerry's words, he said slowly: "Jerry, take it easy. The current loss is still within our acceptable range, and the broker has not called for a margin, so why should we mess ourselves up?" .”

"But…"

"Nothing!" Carl suddenly became agitated, pointing at the computer screen and shouting hysterically, "Jerry, my good buddy, didn't you see it? Large-scale liquidation, I believe they have completely withdrawn from the market, and tomorrow is the option execution day, when more shorts will enter the market, which will protect us, and more bulls will choose to leave tomorrow. "

"Jerry, have you seen it? Tomorrow is the time when the market reverses. I dare to predict that the price will definitely fall to 2,700 US dollars tomorrow, or even lower. Don't look at our loss now. Wait until this time tomorrow. I can guarantee that we are profitable on the books. Jerry, Jerry, these indicators and K-line charts are completely based on your analysis, you should support me!"

  Looking at Carl who suddenly lost his composure, Jerry sighed secretly, and returned to his seat sullenly. He knew very well in his heart that Karl was also under tremendous psychological pressure, otherwise he wouldn't suddenly become like this.

   "How is it, buddy, what did he say?" Jerry just sat down, a trader next to him immediately came up, curled his lip at Carl's place, and asked anxiously.

  Jerry shrugged, spread his hands, and reluctantly repeated what Carl said just now.

"But how does he know that tomorrow's option exercise will be dominated by short positions? What if the announced execution of long options is more than short options?" Hearing what Jerry said, other traders chattered and discussed, one of them What they are most concerned about is the situation of option execution tomorrow.

   "I'm afraid only God knows this question." Jerry put his body heavily on the chair and thought deeply.

Then he stood up and said to his puzzled colleagues: "Guys, in order to increase the ability of our positions to resist risks, we must increase the average price as much as possible. Although we only have partial authority, you can throw away the low positions. Take a short position, then build a short position at a high position, and try your best to operate."

   Thank you very much for the monthly ticket support of book friend Xianjia for three days!

  

  

  (end of this chapter)