The Rebirth of the Financial Hegemon

Chapter 203: Forced to Kill

The futures market is derived from spot prices. It is a modern financial derivative instrument. In essence, it still serves economic development.

According to futures trading rules, each futures contract is equivalent to a purchase and sale contract for goods.

A standardized contract.

It was this standardized contract that allowed Zhao Jiangchuan to catch the loopholes.

According to the regulations of the Suzhou Exchange, after the delivery period of Huangxiaodou, whether it is a long or short order, it must be delivered in kind.

This is also the main logic of short selling.

The continued decline in spot market prices has caused the futures market to follow suit.

As an economist later said, a good harvest does not mean that the people can have a good year.

Because of the increase in output, short sellers can infinitely amplify this increase to impact the price of the futures market.

In addition, Japan has stopped importing, leaving China’s red adzuki beans uninterested.

Short-term changes in the relationship between supply and demand have put China's red adzuki bean market under great pressure.

Therefore, after the Spring Festival of 1994, the price of red adzuki beans in China has been declining, and the price has plummeted from 5,600 yuan per ton to 2,000 yuan per ton.

The unfathomable price almost swallowed up any funds that dared to go long.

But in fact, red beans are agricultural and sideline crops, and the planting area in China itself is not very large.

No matter how much production is increased every year, it is difficult to increase its scale by more than 50,000 tons.

The daily volume of transactions in the futures market, if converted into spot prices, would exceed 500,000 tons almost every day.

This is normal because futures are traded on margin.

Most of the funds traded in the futures market are for speculative profit, except for some merchants who are doing hedging.

It was precisely this that allowed Zhao Jiangchuan to see the real loopholes in it.

The three major short sellers in Hongxiaodou alone have accumulated positions of more than 300,000 lots.

According to the standardized contract of the Suzhou Exchange, every ten tons is one purchase and sale contract.

In other words, just the three major short sellers will theoretically need to hand over 3 million tons of spot goods in the future.

The total annual output of red bean in China is only 400,000 tons.

Therefore, if all delivery rules were followed, it would be impossible for short sellers to come up with so much spot for delivery.

This kind of thing was difficult to notice in China in the 1990s.

Usually, those capitals often rely on their money to rob violently, and kill anyone who refuses to obey.

I don't care about this kind of warehouse difference relationship at all.

But in the eyes of a guy like Zhao Jiangchuan, it's a huge loophole.

As long as the price of domestic spot goods is raised, all the short sellers holding short orders can be forced to death.

If it were placed later, it would have a very flavorful noun.

Forced to kill.

Forced position: refers to one party taking advantage of capital or warehouse receipts to dominate the market to move unilaterally.

Trading behavior that causes the other party to continue to lose money and eventually have to close the position.

Generally divided into two forms: long squeeze and short squeeze.

Forcing is a kind of market manipulation behavior. It mainly forces opponents to submit by manipulating two markets, namely the spot market and the futures market, to achieve the purpose of obtaining huge profits.

Long short squeeze.

Market manipulators take advantage of capital or physical goods to sell a large number of certain futures contracts in the futures market, so that their short positions greatly exceed the ability of many parties to undertake physical goods.

As a result, the price of the futures market fell sharply, forcing speculative bulls to sell the contracts they held at low prices and admit losses, or they were unable to take delivery due to financial strength and were fined for breach of contract, thus making huge profits.

Long squeeze: in some small varieties of futures trading.

When market manipulators anticipate that there will be insufficient spot commodities available for delivery, they use their financial advantages to establish sufficient long positions in the futures market to drive up futures prices.

At the same time, a large number of physical objects available for delivery are purchased and accumulated, so the price of the spot market rises at the same time.

In this way, when the contract is close to delivery, short-selling members and customers are forced to either buy back the futures contract at a high price and close the position at a loss;

Either the spot is purchased at a high price for physical delivery, or even fined for breach of contract due to the inability to deliver the physical object, so that long position holders can make huge profits from it.

What Zhao Jiangchuan uses is to squeeze short.

The spot market will be wiped out, forcing short sellers to be unable to take out the spot for delivery.

…

Zhao Jiangchuan discovered that Li Dapao was really a talent.

“The relationship between red and black.

Due to the perspective of biological genetics, during multiple piston movements, melanocytes will gradually precipitate, causing the original pink color to gradually turn into black.

But as long as you eat red adzuki beans for a long time, the biological protons in them will gradually repair the cells deposited by melanin, allowing the cells to regain their original color..."

"We can see that the skin of red adzuki beans is red. It is rich in red factors. Long-term consumption can keep women the most supple pink..."

"Japan's annual production of red adzuki beans imported from China is 130,000 tons, and the annual production of red adzuki beans in Japan is about 90,000 tons. Why does Japan import so many red adzuki beans every year? ...The reason will be explained next time."

“According to statistics from Japan’s authoritative organizations, 70% of Japan’s red adzuki beans are consumed by women.

Anyone who has watched videos from the island country will know that there are almost no black fungus among Japanese women.

Because Japanese women eat adzuki beans all year round, with the help of the biological protons of adzuki beans, the melanin produced during piston movement is eliminated. "

"In Japan and the United States, adzuki beans are regarded as the most advanced health care products. The nutrients contained in them can re-expand the corpus cavernosum and contribute to the secondary development of men..."

"Certified by Edwards Health Care Institute in the United States, the red particles rich in red adzuki beans can help women restore their body's activity. As long as they eat more red adzuki beans, the fungus with precipitated melanin can become pink and slippery again..."

“…..”

Many tabloids and magazines across the country have recently published similar articles.

And these are all done by Li Dapao.

Zhao Jiangchuan just casually mentioned a few words and asked Li Dapao to write a few articles to help Hongxiaodou build momentum, and Li Dapao wrote several high-quality articles eloquently.

How high?

As high as three stories.

Biological genetics, melanocytes, biological protons.

Cavernous body.

American health care organization.

Various terms that looked very professional and difficult to understand gave Zhao Jiangchuan an uneasy feeling when he read these articles.

There are many vocabulary and majors that even Zhao Jiangchuan has never heard of.

But that's not important. What's important is that it looks very professional at first glance.

What's even more powerful is.

Li Dapao has almost captured the inner weaknesses of both men and women.

Which woman doesn’t want her fungus to be pink forever, and which man doesn’t want to grow again.

So, the effect…..