Chapter 98 Entry of Unknown Funds

  Stock index futures market.

  When the news of raising interest rates came again, the short sellers were excited and sold short orders at 2320, and quickly wiped out the long orders at this price.

The market's follower also followed the big short sellers and sold short orders, and soon pushed the bulls to 2315. Here, the bulls laid out the first line of defense, accumulating a total of about 40,000 lots at the price of 2315 multiple orders.

  However, this line of defense was soon broken through, and the 40,000-plus orders at this price were wiped out again within a few minutes, and the value of the stock index continued to fall.

  Although it will only come into effect tomorrow, the news of interest rate hikes still dealt a heavy blow to the stock market. The FTSE 100 index fell sharply after a slight rise, and then fell again after a slight improvement.

  2314, 2313, 2312…

   These price levels were broken almost in the blink of an eye.

At the price of 2310, the bulls once again set up a defense line. This time they sold twice as many lots as the previous defense line. to attack.

People who invest in stock market futures basically have no spot dealers, because stock index futures are settled in cash in the end, and there will be no physical objects. There may be some funds that do ETFs, but these funds often use stock index futures to make money. Risk hedging.

   Therefore, when the wind changes, investors who follow the trend often rush in, as if the fire takes advantage of the wind and becomes out of control.

For retail investors, when the market trend changes, they must quickly complete the large-amount buy or sell order, so as to ensure that they will not get any benefits, and will not become a trap when large institutions change their operation direction. cannon fodder.

  However, the "time priority, price priority" trading method has derived various operating skills, which are enough to keep these retail investors with relatively small funds at a certain price point.

  For example, before the long line of defense at 2315 was broken down, retail investors only need to sell contracts at 2313 or lower before the short position, and the transaction will be completed quickly. But at the price of 2310, if the short sellers cannot break through the long defense line, then the market price will stay at 2310, even if retail investors with small funds sell short orders lower than this price, they will not be able to make a deal.

   At this time, it still depends on the offensive and defensive battle of large funds.

   But this also continues to create problems. If a short seller has a large amount of funds, which are enough to shake the entire market of this month's contract, can he unscrupulously pull up and pull down the trick?

Naturally, when designing the futures game, the management has this problem in mind. They will constantly monitor the positions of each seat, and then adjust the margin according to the difference in positions every day to ensure that there are enough opponents in the market. Some positions with huge positions will be warned and asked to explain their actions.

In a large enough market, they don't worry about price manipulation, but in a smaller market, the management will issue a statement to member companies, stipulating that their total positions should not exceed the number of one side of the market, limiting their size In a ratio, generally this ratio is 15%.

  However, in some futures contracts, there are still congenital defects, which is a typical long-short squeeze. Most of these futures contracts require physical delivery during the delivery period, so the short side must buy the subject matter specified in the futures contract in the relevant market, then sell it to the exchange at the price on the contract, and then the exchange will deliver it to the exchange. The side that is long.

  This phenomenon is rare, and most of the contracts have been hedged before delivery, but it is not impossible. For example, for some short-term treasury bill contracts, the long side can buy the full amount in the previous treasury bond auction, and then go long in the futures market without deliberately hedging, and force the short seller to pay a price far exceeding the futures contract on the delivery date. buy it.

   However, in the stock index futures market, this phenomenon is unlikely to exist.

The attacking momentum of the bears stopped at 2310. At least 200 million pounds of funds are needed to take down these long orders. This is undoubtedly a very big threshold for a market with an average daily transaction volume of 300 to 400 million pounds .

   But if this threshold is crossed, the bulls probably don't have much money to deploy the third line of defense, and the general trend of the day is settled in this way.

Nearly 100,000 lots of long orders have been hanging there without any sign of decreasing, which shows the determination of the bulls to stick to it. After tentatively throwing out tens of thousands of empty orders, the short sellers also stopped attacking. After a few minutes of surging volume, the volume finally stopped.

  At this moment, Zhong Shi is powerless. Most of his 60 million pounds have been converted into contracts, with an average price of 2303 points, and each contract basically has a floating profit of 7 pounds.

  The reason why it is called floating profit is because if the price of the futures contract drops to 2303, his book profit will be cleared immediately, and if it falls again, the margin will be called.

  The current situation is that the long and short sides have come to a stalemate at 2310. Only at this time can the two sides have the energy to turn their attention to other places again.

  Too many things happened on this day. First, the foreign exchange market suffered a serious attack, then the interest rate was raised suddenly, and then in less than a day, the interest rate was raised again, which has completely overturned many people’s impression of the market.

  However, history dooms this day to be extraordinary, and many investors will experience more incredible phenomena.

  Stock market.

The news of raising interest rates again made the investors who had finally woken up from the stock market drop just now feel dizzy again, and their eyes were full of gold. Many investors were whispering what happened. But professional economists and analysts know that this is a measure taken by the British government in response to the pressure of selling in the foreign exchange market.

They may more or less understand that foreign exchange speculators have been shorting the pound recently, but there has never been a precedent in the world where a country's central bank has been defeated by foreign exchange traders, so they believe that the Bank of England has sufficient capabilities to deal with the currency crisis.

  In fact, they are very happy about the fall of the pound. The fall of the pound means that the competitiveness of British goods has been greatly improved, which has a stimulating effect on the economy, and the stock market has therefore continued to strengthen in recent days.

   Just after they watched the green line continue to run on the screen in the morning, almost everyone who was going in the right direction was excited, and they had reason to believe that today will be another day of rising.

The next thing was the interest rate hike news at noon. The real estate sector was the first to bear the brunt. The stock prices of many famous real estate companies continued to fall, and the trading volume began to shrink. In fact, it was the stocks of financial institutions, especially the banks. This sector accounted for a large proportion of the entire index composition, and soon drove almost all stocks down.

  However, there are also quick-response people who quickly understand that the pressure on the British government and the central bank in the foreign exchange market may be unprecedented, otherwise they would not have announced a rate hike in such a hurry. Some bolder people even guessed that the British government might not be able to stand the pressure in the foreign exchange market and announce the devaluation of the pound, which would definitely be a huge boon for the stock market.

   This creates an opportunity to buy bottoms in the short term.

   It is under the **** of this logic that these people began to increase their positions on a large scale, and some even couldn't wait to raise funds from brokers to buy stocks in a leveraged manner. It was under the buying of these people that the stock market experienced a short-term recovery, which also gave Zhongshi's funds a chance to buy in the stock index market.

  However, when the news of the second interest rate hike came, these people’s funds were also depleted. Before that, the crazy increase in positions had exhausted most of their funds.

  Seeing that the stock market will slide again, even in a free fall.

Those who are long are dejected and can't wait to sell, but there are very few takers in the market. The trading volume has dropped rapidly from the peak a few hours ago to the bottom. Even those who have funds in their hands have begun to wait and see, not knowing the end What will happen to the foreign exchange market in the next few hours.

   Just as most people were waiting and watching, a wave of funds that came out of nowhere began to sweep the goods.

   This stock of funds is coming fiercely, and it has taken over a large number of stocks in the market, especially the stocks of real estate, banks, financial institutions, and foreign trade companies.

  Although these companies have different main businesses, they all have one thing in common, that is, they are closely related to financial indicators such as exchange rates and interest rates.

  When shrewd analysts saw this, they realized after a little meditation that this was the entry of funds from foreign exchange dealers. This means that on the foreign exchange market side, the overall situation is basically set.

  As a result, analysts and brokers called their clients one after another, advocating buying stocks at this time, and fund managers quickly understood this truth, and once again instructed their traders to increase their positions.

  The foreign exchange market has become clear, and the pound has lost.

Since the battle is on the front line, the Wall Street hedge funds who are fully aware of the British government's intention to raise interest rates are the first batch of funds to enter the market. A huge amount of money has been invested in the market, and then there are foreign exchange traders. Although some of them do not directly invest in the British stock market, it does not prevent them from spreading the news of the collapse of the pound.

  The Financial Times Index rose instantly, swallowing the negative line at a jaw-dropping speed.

  In the stock index futures market, because of the entry of this fund, the two sides that were originally stalemate broke the stalemate balance again. Following the stock market, the bulls began to exert their strength.

  …

  When the market closed, the FTSE 100 Index steadily gained 2378 points from the opening price of 2370 points, which was also the highest point of the day. It ended up inching up 0.35% on the day after a 3.33% swing down. (Thank you very much for the reward from the book friend Radiation Source! Thank you very much for your active votes for Sanjiang, even if the position has recovered a little, the author’s depressed mood will recover ~ I sincerely hope that more friends can come to support ~ Give the author more power ~)

  (end of this chapter)