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

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

Then there is international crude oil.

International crude oil rose sharply after hitting a four-year high on October 3, 2018. Abel recalled that major traders at the Asian Petroleum Conference (AAPEC) at the end of September and early October that supply was tighter. Brent 90 is a small target, and 100 is not a bold statement, which makes people feel like a different world......

But it doesn't matter.

Many people still believe that the decline in international crude oil in the past half month is just a self-adjustment of the market.

Just like the market has adjusted many times before, even if the price has dropped so many times, the price of international crude oil is still above US$70.

Can it still fall to the previous $40 or 50?

Look, this has been rising continuously for three days, okay?!

Originally.

When international oil futures were first born.

It is a hedging method.

The oil crisis that occurred in the early 1970s brought huge impacts to the world's oil market, and the violent fluctuations in oil prices directly led to the emergence of oil futures.

After the birth of oil futures, its trading volume has been showing rapid growth, surpassing metal futures and is an important part of the international futures market.

There are four important crude oil futures contracts in the world, namely the New York commodity futures contract, the Star Singapore acid crude oil futures contract, the Dongxjing Industrial Products and the UK's Brent crude oil futures contract.

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

The basic practice of hedging is that the company buys or sells oil commodity futures contracts with the same number of transactions as the spot market but the opposite direction is in a bid to offset the actual price risks brought about by changes in the spot market price by hedging or closing compensation at a certain moment in the future.

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 is used to replace a larger risk, and a spot price difference risk is used to replace the risk of spot price change.

However, capital has 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.

It has been developed over the years.

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

To put it simply.

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

It has become an intermediary for gambling between international capitals.

October 24, 2018.

After three consecutive days of increase.

New York International Oil Futures has a barrel of international crude oil, and the current price is: US$71.67.

It is at this moment.

Abel threw out a US$10 billion margin to the market, requiring a long-term trading betting order with a minimum of five times the leverage multiple.

To put it simply, he threw out 10 billion US dollars and used this 10 billion US dollars as margin to bet against players in the international futures market who have the strength to take such orders. What he bet is that the international crude oil market will continue to decline in the future.

According to his request, his funds will be amplified into an international crude oil order of 50 billion US dollars.

If someone takes over the order, it means that at today's price of $71.67. If this price rises, Abel will increase by more than a loss based on the price of $71.67.

If the international crude oil price falls.

So based on the price of US$71.67, the order will be relatively profitable as much as the price drops in a barrel.

Because it is used for margin trading.

Under the high-risk leverage multiple, as long as international crude oil rises to more than US$80, his margin base of US$10 billion will be completely lost.

Even if it only rose to more than US$75.

His margin of $10 billion will have a minimum loss of more than 30%!

After the margin of 10 billion US dollars is expanded by five times and becomes a 50 billion order. If you convert the specific quantity of oil futures, this is the international standard of New York Oil, which is close to 700 million barrels.

Simply put, it is a cfd contract with a huge amount of money!

This order is too big.

After he threw it into the international futures market, no one responded for a long time.

Unlike the foreign exchange market with strange storms, the futures market responds much slower.

But this 10 billion yuan of funds.

Just like a fragrant bait, there will always be big fish that smells and come to the door.

Don't say anything else.

Even Wells Fargo, which has a good relationship with Abel, was caught by this tempting $10 billion.

In the office of one of the highest leadership on the West Coast of Wells Fargo, several floors away from Abel.

Alpha put down the phone with a wry smile.

Opposite him are John Mellon and the remaining several Wells Fargo West Coast tops.

It's already night now.

It has been four hours 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 order!"

"What do you think?!"

Everyone looked at each other.

To be honest, this kind of large-scale long-term futures contract, the many conditions contained in the contract are often beneficial to banks and large financial institutions.

For example, Abel's contract this time.

First of all, a contract of 10 billion US dollars can be divided into several small portions. Wells Fargo can choose to eat some of them, 2.5 billion US dollars, 3 billion US dollars, or 1 billion US dollars.

Then the contract handover period is one month later. That is to say, if Abel makes a profit and he asks to close the position, it must be a one-month contract handover period.

But if he loses, as long as he falls below the security line of margin, he doesn't have to wait for the handover period of this month, and his margin will be taken back by the bank and his position will be liquidated.

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

As long as the international crude oil price can rise to more than US$76.

Wells Fargo won the bet.

Abel's margin will be collected by Wells Fargo.

The other banks that noticed this fragrant bait were the same.

"John, what do you think?" Alpha looked at the West Coast with a headache, John Mellon, who was most likely to take over his job in Wells Fargo.

"What do I think?" John Mellon pondered for a moment, "I personally recommend that we not accept orders. But we can use third-party guarantees to charge a certain interest and service fee. Just like so many cooperations before!"

Don't eat it?
Chapter completed!