lcionline Chapter 66 Xu Liang: Don't invest in Huanda Automobile!
Chapter 66 Xu Liang: Don't invest in Huanda Automobile!
【￣へ￣】
So
[I advise you not to exploit this system bug]
Otherwise, you'll encounter this situation sooner or later.
Jiang Feng's eyes widened, cold sweat pouring down his face. Although he would definitely roll over his positions before the futures contract expired, what if the stock price suddenly crashed? How could he possibly predict that!
The system is instructing you to short sell.
Do you dare to short sell and then immediately go long?
Exploiting bugs is risky!
He wiped the sweat from his brow, his face still showing signs of fear.
If you just bought crude oil contracts, you'll lose a lot of money even without leverage. If you didn't set an automatic liquidation price, you'll lose everything in an instant, leaving you with nothing!
Jiang Feng now deeply realizes—
1. Futures trading without leverage is also very risky.
2. Automatic closing of positions must be set.
3. Positions must be rolled over before the contract expires.
4. Don't try to exploit system bugs.
The system wasn't wrong; $20 per barrel was the lowest possible price. The sudden crash just now meant that not many could be bought, making it impossible to close out positions.
Perhaps making a small profit is not a problem!
But this is no longer within the scope of system rewards.
╮(╯_╰)╭
"The futures market is really risky!"
"However, there shouldn't be any major problems today. The institutions will definitely roll over and liquidate their positions. Those who get liquidated must be complete idiots, right?"
Jiang Feng muttered to himself, guessing—
Currently, there shouldn't be many people holding contracts, and as long as warning lines and forced liquidation prices are set, there shouldn't be any serious losses. However, there will always be some fools who get wiped out.
Hahahaha~
He smiled smugly. Every stock investor wants to make money, while everyone else is doomed.
Gambler's mentality, huh?
While having breakfast, Jiang Feng, Zhang Wei, and Su Meng also talked about the negative price of crude oil futures.
The academically challenged can't understand this—
"Can futures prices go negative?"
Do you charge extra for buying things?
"This doesn't make sense, does it?"
Jiang Feng smiled and explained, "No, no, no, this is normal. You need to understand what futures mean. If you buy a contract this month, you have to pick up the goods in the United States the following month."
"Now there is a super flu outbreak, oil depots are full, there is nowhere to unload, and it is very difficult to pick up the goods. Even if you are given the goods, they cannot be transported away. This is the source of pressure for the flash crash in crude oil futures prices."
"The cost of delivery is higher than the price of crude oil!"
"This is a hot potato!"
"A large number of short-selling orders are being placed."
"Without buyers, prices will fall."
"Forced air squeeze!"
"The biggest reason is that the contracts are expiring, and no one wants to take delivery. There are also short orders, so everyone is selling and selling. There are no buyers to take over, so the trading price will continue to fall, and there will be a brief flash crash until someone goes long and buys in."
"Bring the transaction price back to the market price."
"That's perfectly normal!"
"Prices are determined by supply and demand. When supply exceeds demand to a certain extent, the commodity becomes equivalent to garbage."
"Trash, selling at negative prices is normal, isn't it?"
(→_→)
He gave a vivid analogy.
If nobody wants it, isn't it just trash?
Is it normal for waste to have negative prices?
Su Meng nodded in realization. She was a poor student, but not stupid. On the contrary, she was exceptionally smart!
I understood the logic behind it instantly.
Jiang Feng casually predicted, "Financial investment institutions will avoid risks, so there shouldn't be any major losses."
however
Attorney Zhang Wei said awkwardly, "Uh, I just received a message from my American colleagues that a certain bank in China has suffered heavy losses!"
"Paper crude oil products suffered a margin call—"
"Losses exceeding one billion US dollars!"
Jiang Feng: "Huh?" (￣皿￣)
What? A bank?
"How could a bank be so stupid?"
"Isn't automatic closing set up?"
Why not roll over the position?
His face was filled with disbelief and utter shock!
Zhang Wei explained speechlessly, "The situation is complicated. You know about paper crude oil; banks can't decide for customers whether or not to roll over their positions. Besides, at 2 a.m., who has staff on duty? What's worse, the bank's trading system can't be used at night, so customers can't operate it themselves."
Paper crude oil is a bank product linked to US stock crude oil prices. It does not involve leverage, so theoretically the risk should be very small.
There's no leverage.
Many domestic investors, who don't know how to trade US stocks, buy paper crude oil from banks to try and catch a bargain!
Their thinking was that since there was no leverage, the price would definitely rise back up sooner or later, and they would definitely not lose money.
Unfortunately, they never expected this—
Crude oil futures can have negative prices!
Are cheap deals really that easy to find?
If it were so easy to pick up, would it even be your turn to pick it up?
Don't they even look at the current situation?
In fact, banks like ICBC and CCB had already sensed something was wrong and shut down their paper crude oil futures trading in advance! Many institutions predicted that crude oil futures prices would fall into negative territory.
Those who can avoid making mistakes are all incredibly smart.
Why are other institutions unaffected?
Of all people, you were the one who exploded!
There are dozens, if not hundreds, of domestic institutions trading US stocks and crude oil. Who among them has lost so much that their account has been wiped out?
Blaming the stock exchange is untenable!
Can an exchange set a trap for you on its own?
(￣^￣)”
The client bears a great deal of responsibility. He dared to invest in futures without understanding the risks, and failed to roll over his position on the contract expiration date, which was a major reason for his losses.
It's even more outrageous that the bank didn't set up forced liquidation and allowed the product to plummet to a loss; that's just plain stupid.
This is practically a crime!
Both the bank and the customer were laymen with no relevant experience, so their losses this time were entirely justified.
We must learn from their mistakes!
Jiang Feng also started buying crude oil.
+1 million US dollars
+1 million US dollars
+1 million US dollars
...
Buy when prices are low, stop when prices are high. Orders worth billions of dollars need to be processed slowly to build positions at low prices.
His investment is not yet finished.
Su Meng and her friends made a fortune!
Huanda Automobile's stock price soared.
+ 9.01 %
+ 7.44 %
+ 8.68 %
...
The stock price surged daily, doubling in value repeatedly, accompanied by a constant stream of positive news, creating an illusion of a castle in the air and driving up the price.
It surged to 30 yuan per share in just a few days!
500% increase
They earned a whopping 30 million RMB!
Su Meng, Xu Jiao, and Xu Lin were scared and couldn't believe that Huanda Auto had such potential, but their classmates and friends admired them immensely and showered them with compliments.
Even Deng Ning and Wei Junjie were praising him in their high school classmates' group chat, sighing with envy:
[Brother Feng's luck is simply incredible!]
[Several of my sisters-in-law bought six million yuan worth of Huanda Automobile stock, which skyrocketed fivefold, and they've already made thirty million!]
[So envious!]
[￣ Pan￣]
[Holy crap! Brother Feng is awesome! YYDS!]
[Brother Feng is awesome!]
[Brother Feng is awesome!]
[Holy crap! I'm so envious!][T~T]
[+1]
[+1]
[+1]
These old classmates' eyes were all red!
Damn, why does Jiang Feng's woman have such luck, easily making 30 million? Why?
Fuck
Many female classmates wished they could take his place. If I were Jiang Feng's girlfriend, wouldn't I be able to earn tens of millions and become the coolest girl on campus?
Xu Liang gritted his teeth, filled with envy, jealousy, and hatred!
I couldn't help but reply in the group:
[The technology of domestically produced new energy vehicles is terrible!]
[This stock price is unusual!]
[There might be a problem!]
[You absolutely must not invest in this!]
Watching Jiang Feng make money was truly painful for him! Xu Liang also knew that Huan Da Auto had the backing of a real estate company, so it would definitely continue to soar and push up the stock price.
Huanda Group is a real estate tycoon.
How could there be a problem?
He was just talking nonsense.
Jiang Feng's eyes widened in surprise—
[Heed advice and refrain from emptying Huan Da's position]
[Huanda Auto is utter garbage; its stock price is inflated. After a six-fold surge in a short period, it quickly plummeted; then it surged again, only to crash once more to almost zero.]
[First peak stock price: 35]
[30% drop]
[Second peak stock price: 72]
[99% drop]
.