Chapter 79 Exotic Options (2)

  RB's capital will naturally not be caught without a fight, and it has been stubbornly resisting throughout February.

  In their view, the current decline is only temporary. Except for those unfavorable news, the entire RB economy is still doing well, and there is no news at all to prove that RB's economy is going down.

   But it only lasted for less than a month, and soon, RB's stock market continued to fall.

This decline began on February 19th. After two consecutive red lines were drawn, the RB index plummeted by more than 1,000 points on the third day, with a drop of 3.15%. On the following trading day, the bulls were unable to counterattack, resulting in subsequent The two trading days continued to plummet, and RB's index continued to decline, falling by 2,500 points in two full trading days. After a slight uptick in the last two trading days of February, which managed to regain 1500 points, the tone for the whole of March has been set.

  The cruelest March was undoubtedly extremely tragic and catastrophic for many RB companies and shareholders. The index fell all the way from 34,587 points to 28,002 points in early April, a full drop of more than 6,000 points, which is more than 10,000 points away from the peak period of 38,957 points, and the market value has dropped by more than 30%.

   It seems that the bubble has been almost squeezed. Perhaps the current market value can truly reflect the economic situation of RB.

At the beginning of January, due to concerns about the status quo of the stock market, a lot of capital withdrew and sold a lot of RB stocks, causing the market to fall, and the decline in turn accelerated the panic in the market, causing more stocks to sell . Under such circumstances, the situation of securities lending has been greatly improved, and some capital can be shorted without scruples, which once again accelerates the decline of the market.

   It's like a vicious circle, the decline is scary, then it is a sell-off, and then it continues to fall.

  Everything is caused by faith.

   It should be noted that some of the international hot money that withdrew from the RB stock market did not withdraw from RB, but invested in the real estate market, which was still hot at that time, which also paved the way for the future collapse of the real estate market.

   It is strange that the RB government has an ambiguous attitude towards the stock market decline, and rarely expresses relevant views in public. Maybe they're still content to some extent.

   Yes, the bubble problem that politicians have been worried about has been resolved, justified by their frequent rate hikes in the previous year. The international hot money is also satisfied. Before that, they made money by being bullish on the stock market, and then they pulled out in time, and made a lot of money in the futures index.

   It is RB's business and ordinary investors that have been hit. Compared with those big companies, ordinary investors may be more traumatized.

   But even these ordinary investors, not everyone suffered significant losses. But don't forget that many of them may have entered the market before October 1988. The lowest index at that time was 26,701 points, which was lower than the current 28,002 points. Therefore, it is very likely that these people also made money of.

   So who lost money?

   Still an ordinary investor!

The index mentioned here is the weighted sum of many stocks, not a single stock. In fact, many investors do not follow the principle of risk diversification to invest, and it is impossible for them to buy with the same ratio as the index. The constituent stocks in their hands may rise when the stock market rises, and when the index plummets wildly, the stocks in their hands often fall more fiercely than the constituent stocks. After all, the performance of the constituent stocks is there .

After successfully capturing the wave band of RB's stock market crash, Zhong Shi cleared all positions in April in time. After all, he didn't remember RB's K-line chart very clearly at that time. After leaving the market, he made a rough estimate. In the past few months, he has managed to earn more than US$600 million in Singapore's Nikkei.

  These are all based on a single limited position. In fact, the seat of Alfred Far East’s brokerage company was basically completely occupied by Zhongshi’s funds during this period.

  Everything looks so perfect.

  European and American funds in Singapore began to build positions in May. They made a fortune during these three months. Capital that has tasted enough sweetness will not give up every opportunity to make profits. Someone once roughly estimated that during this period of time, it is conservatively estimated that if these short positions have been heavy and bearish, the profits may have exceeded 100 billion U.S. dollars.

Of course, these are all under ideal circumstances. In fact, when the Nikkei index plummets, there is no corresponding counterparty, the long position is due to insufficient margin, and the exchange increases the margin to balance both parties. However, the profits earned by these funds are not as much as imagined. Even so, these funds have swept away a total of 30 to 40 billion US dollars in profits.

  As the main force of the short sellers, Jim and his team earned another 8 billion.

   But the only fly in the ointment is that the 100 million U.S. dollars they manipulated privately was completely wiped out, and soon became a small wave in the vast ocean and disappeared without a trace.

  Jim, who embezzled client funds privately, escaped a catastrophe because of his caution. He lost 20 million US dollars in the futures index market, and he did not dare to operate the remaining 40 million US dollars until the middle of March when he issued a notification letter to his clients, announcing that he would refund all the funds, although only 80% of the previous ones, But most of the investors are still very satisfied. After all, they are already very satisfied to have such a stop in the RB stock market on that day.

  Jim is going to put more energy on that sum of more than ten billion dollars. But soon, the right to use these funds was taken back by the consortium behind them. Naturally, they have gained a lot after working hard for more than half a year. They gave them a total of 100 million US dollars in cash rewards.

  These impromptu traders were each allocated about $10 million, and most of them chose to operate on the Nikkei rather than return to their original investment banks. The profits obtained during these times have exceeded the salary that most of them can get in their lifetime. In this case, it is inevitable to choose to fly solo.

  These traders quickly plunged into the May Nikkei contract, full of confidence, and they soon knew how lucky they were to be a part of a great battle. Beginning in April, the RB index began to recover. Thanks to the beautiful economic data in the first quarter, the Nikkei index finally stopped its decline and began to rise for three consecutive months. The peak once rushed to 33344 points. Months of the market did not reappear.

  Most of these traders gambled in the wrong direction and quickly lost a lot of funds in their hands. Later, some of these traders returned to the West with the remaining funds, and some began to do more in the opposite direction.

  As for Maxim, the private deal he reached with Jim was also voided because Jim’s fund was dissolved. After getting 10 million US dollars, he chose to travel around the world, and at the same time observe which market has the greater chance.

And Jim himself, like most people, also devoted himself to the Nikkei index market in Singapore, but he soon discovered that the market was completely different from when he was operating. It was so small that he could no longer find the feeling of calling the wind and calling the rain. Soon, he lost five million dollars out of thin air on April 18th and 19th because he gambled in the wrong direction.

  Since then, Jim disappeared on the streets of Tokyo, and he was rarely found among the foreigners living here. It was not until 1997 that Jim reappeared.

  As for the funds, except for some that continue to be operated in the Singapore market, most of them returned to Europe and the United States, and then they were broken down into parts and turned into the first quarter profits of investment banks, funds, banks, etc. Of course, for those analysts and traders who contributed during this period, the capital also generously issued a large amount of check rewards.

   Among them, Stanley provided generous cash rewards to some derivatives traders within the company, because within the company, it was not allowed to write checks exceeding 100,000 US dollars, so some traders received several envelopes. You must know that in those days, even partners were rewarded with millions of dollars every year.

These rewards of millions of dollars strongly stimulated a young man who was working in the liquidation department of Stanley Company at that time. He felt that his future in Stanley Company was hopeless. The old-fashioned bank started to work in securities trading.

   Soon, due to his excellent work, he will be sent to Asia to manage the bank's business in Asia. Later, he did a major event that caused a sensation in the global financial circle, and directly bankrupted his employer!

   Not only that, but also because of these things he made, he directly overthrew the Singapore Exchange’s position as the leader in Nikkei futures. Since then, the Singapore Futures Exchange is no longer the first choice for investing in the Nikkei.

  He is Nicholasson, the future king of Nikkei.

   (Actually, Nicholson left Stanley in 1989, the year has been slightly changed here for the sake of the novel.)

  (end of this chapter)