"Are you sure they're not against us?"

Jamie. Thompson angrily stormed the CIO's office and pointed at Bruno. Ixiel's nose asked, "Now that the position has swelled to nearly $180 billion, far exceeding the need for hedging, isn't it the Tianyu Fund that is working against us?" ”

It's been three months since Bell Stone purchased IG9's five-year contract. During these three months, there was always a force in the market to oppose JP Morgan on the IG9 contract, buying a five-year contract and selling a 10-year contract, so that the narrowing of the spread that JP Morgan hoped for never happened.

"Unlikely!"

Bruno. Ixir raised his head, with a pair of huge dark circles under his eyes, and replied weakly, "It's just a transaction worth a total of $30 billion, and the cash is only about $1.5 billion, so I'm afraid that Tianyu Fund is not eye-catching yet." ”

"And Zhong Shi, this guy, what he likes most is floor trading, they basically don't get involved in derivatives, at most some futures or options, I'm afraid he doesn't even understand what a CDX index contract is!"

He yawned and fell into his seat drowsy, his words already a little out of words.

It is not surprising that he had attended a frenzied party in Berlin last night and had been playing until three o'clock in the morning, and that he had hurried back to London by plane at eight o'clock this day, barely having a quarter of an hour to rest.

"Bang!"

Seeing him like this, Jamie. Thompson couldn't help but sigh in his heart, but it was a pity that the CIO's office was directly managed by the US headquarters, and he, the top leader of the London derivatives, only had the responsibility to ask, but did not have the authority to manage.

He had a cup of coffee. Angrily paused in front of the other party's desk, signaled the other party to refresh himself, and then continued to ask, "Don't forget, they bought more than $10 billion in IG9 contracts from us, how can they have amnesia now?" Do you think the other party doesn't understand derivatives? Tell me, why do you think they're not the ones who are against us? ”

"It's not easy!"

After taking a sip of coffee, Bruno. Reluctantly, Ixiel pulled himself together and said impatiently, "Do you think they will care about our small market compared to the European debt crisis and the fluctuation of the euro exchange rate?" ”

Although the global derivatives market is large, there are various types of products such as options, futures, forwards, swaps, and credit derivatives. In the credit derivatives market, the CDS market is only one part of it, and the IG9 contract is a smaller part of the CDS market. Arguably. If you are not a professional, you will hardly notice that there is such a market.

Compared with the stock market, bond market and foreign exchange market affected by the European debt crisis, although the contract value of the IG market is also quite large, it is not an order of magnitude compared to the above markets, and it is not even qualified to carry shoes.

Hearing him say that, Jamie. Thompson was stunned for a moment, and after thinking about it carefully, he felt that what the other party said seemed to make some sense.

"He's a big guy. Naturally, they will keep an eye on the big market! ”

Bruno. Ixhir rubbed his eyes and continued to explain. "Even if we really target a market like ours, the amount of money that can be spent in advance is limited, and it is impossible to sustain it for a long time. And for us, there is an almost endless amount of money at the disposal of this market, so even if they do, I am not afraid! ”

"And. Do you really think they'll be able to spot something unusual in this market? ”

Not waiting for Jamie. Thompson said something to Bruno, and Ixhire smiled disdainfully and went on to explain, "For the time being, because of our actions. There is a deviation between the CDS price in the contract and the CDS price in the IG index, and only the arbitrage institutions in this area will find this phenomenon, and then find that we are tired of IG9 contracts. Think about it, what kind of institutions are arbitrage institutions on CDS and IG contracts, and do you think the Tianyu Foundation spends time on this? ”

For example, a company with a $1 million bond may have a CDS price ranging from a few thousand to tens of thousands of dollars if everything is working properly. For IG contracts and CDS prices, if the deviation between the middle is 10% for the time being, it means that there may be arbitrage space of hundreds to thousands of dollars between the two, which is really pitiful.

So Bruno. Ixiel's logic is that instead of spending effort on making this small profit, it is better to go directly to the original underlying market.

"Only when we find a cat in the arbitrage market can it be possible to notice our activities in the IG market."

Bruno. Ixhir continued, "If the stunned young man enters rashly, then we will directly smash him to death with a huge amount of money, so that they can't support it, and they will be finished directly." If it were other agencies, they would definitely investigate who the opponent was, and I think they would avoid it if they knew we were hedging, because they didn't want to go toe-to-toe with us. ”

"But what if they don't shy away?"

Hear this, Jamie. The doubts in Thompson's heart have gone seven or eight points, but he is still a little uneasy, and continues to ask according to the other party's words, "If someone wants to snipe our position, what can we do?" ”

"You're underestimating my energy, aren't you?"

For Jamie. Thompson's question, Bruno. The corners of Ixhir's mouth began to rise, and he sneered and pushed the phone in front of the other party, saying, "You can call the banks with the most positions in the derivatives market, find their relevant traders, and see if we have the same position in the market!" ”

"What do you mean......"

Jamie. Thompson didn't answer the phone, but looked at the other person suspiciously, and asked uncertainly, "Is there some kind of agreement between you?" ”

"Yes!"

Bruno. Ikhir tilted his head and drank his coffee, then crumpled the paper cup into a ball and slammed it into the trash can, and then said in relief, "Actually, we already knew. If we all appear in a certain market, there will inevitably be disputes due to certain interests, which can only lead to a lose-lose situation. So a long time ago, we talked to each other and manipulate different markets at the same time, rather than competing in one market. In this way, everyone earns money together, and it reaches the Pareto optimum, hahaha. ”

"So?"

Jamie. It was the first time Thompson had heard such an inside story, and at this time he couldn't help but regret a little, wishing he hadn't heard what the other party said just now, knowing that this kind of tandem and market manipulation would have unimaginable consequences once discovered. However, now he has no regret medicine to take, so he can only stubbornly continue to ask, "Can this ensure that nothing goes wrong?" ”

"Of course!"

Bruno. Ixir replied confidently. "Let's take a look at how this market works!"

As he spoke, he tapped on the keyboard, and within a few moments, a string of numbers appeared on the screen, and a minute later, the two curves that were flat just now showed signs of separation, "See, I just sold $1 billion of the IG9 five-year contract, and at the same time bought the $1 billion IG9 10-year contract." In this way, the interest rate difference between the two sides has been widened again. Look at it. As long as the spread widens, our benefits will continue to come in. ”

Although I didn't understand what the other party was talking about, seeing his confident appearance, Jamie. Thompson had to force his doubts down.

"It's better not to make mistakes, otherwise you'll ......"

He snorted twice and walked away. All he could do at this time. It's just a cruel word.

In fact, he has also made regulatory submissions to the U.S. headquarters, but they have all been refuted without exception. The CIO department generates so much profit for the head office every year, and has also successfully protected JP Morgan's bond position, and although they are now operating beyond hedging, the US head office is still open to them. They are allowed to engage in speculative activities to the fullest.

"I hope Zhongshi can discover this market, and just let us see who is more powerful!"

But just in Jamie. When Thompson was about to walk to the door, he heard Bruno. Ixhir said this to himself, and he stumbled on the soles of his feet, and almost fell.

For this subordinate, he is already a little poor in donkey skills.

……

"There is another sell order!"

New York, Wall Street, Saba Capital Management.

Saba Capital is a hedge fund founded in 2008 with an initial amount of only $140 million, and although it has grown over the years, the total amount of funds under management so far is only $2.2 billion.

This is a typical small and mid-sized hedge fund on Wall Street, with an aggressive style and fierce strategy, and does not miss every opportunity to make a profit in the market.

It is also one of the many hedge funds that have entered the IG contract and CDS arbitrage market, and with its keen insight, the hedge fund has noticed that the market is wrong, and then realized that it has been artificially manipulated in the IG9 market.

Saba Capital quickly rushed in, and it was impossible for them to give up this kind of opportunity. But after entering, they found that the water in this market was very deep, so deep that it almost drowned them.

"20%!"

At this time, Saba Capital's fund manager, Boaz. Weinstein, looking at the floating numbers displayed on the computer screen, frowned, looked helpless, and was clenching his hands tightly in prayer.

Boaz. Weinstein, a former derivatives trader at Deutsche Bank, started his career as a money-making machine, helping Deutsche Bank make tens of millions of dollars a year. However, during the 2008 financial crisis, his team made a major mistake that resulted in a huge loss of $2.8 billion for Deutsche Bank. Weinstein was swept away by Deutsche Bank.

But Weinstein soon set himself up on his own, setting up what is now a hedge fund and continuing to fight in the derivatives market.

Saba Capital's strategy is completely opposite to JP Morgan's, they buy five-year IG9 contracts and sell 10-year IG9 contracts at the same time, forming a counterparty with the other party, hoping to use their own power to correct the market's inappropriateness. But over the past two months, their efforts have repeatedly proven futile, and to their horror, the amount of money in this adversary seems to be endless, selling tens of billions of dollars in contracts in just a few months.

As a result, Saba Capital is simply unable to reverse the market, and their positions are naturally losing step by step, from the initial 1% to the current 20%.

"Hurry up!"

Boaz. Weinstein clasped his hands together and kept an eye on the market, hoping that the market would correct itself as soon as possible, even though he knew it was unlikely. But in recent months, he has discovered that the spread between the two contracts has opened less than the value of the contract, despite the constant sell-off, and this discovery has made him realize that there may be someone in the market who is doing the same thing as him.

What did not disappoint him was that although JP Morgan's sell order shocked many buyers in the market, within a few hours, the sell order was still digested by the market bit by bit.

"Although the opponent is very strong, it seems that a more powerful opponent has appeared in the past few months, and it has been quietly eating the opponent's sell orders!"

After JP Morgan's sell order was digested, he pondered for a long time, took out a pen and paper, and began to calculate it carefully. (To be continued.) )

PS: Thank you to the book friend Nan nathan, Brilliant Flame, patholoy, and Qile Infinite for voting for the monthly pass! Thank you for the tips of the book friend Sangu fork, Immortal Daozun CI, gengsu, and book friend 160408171253177! Thank you very much for your support, although the situation is not very good this month, but everyone's enthusiasm for support still makes the author very moved, there is support to have the motivation to continue to persevere, I really hope that the situation will improve in the near future, and I also hope that more book friends will actively vote, thank you~