"$100 million?" Andrew on the phone was shocked, silently calculated in his heart, and said in disbelief: "Do you know how much this is?" According to the current price, it is at least 50,000 tons of copper! ”

"Not bad!" Zhong Shi replied categorically: "It's an inventory of 50,000 tons, and I want to play a big game in the copper futures market this time." ”

Hoarding spot first and then pulling futures is a practice that futures professionals disdain. However, in the history of commercial development, this kind of behavior often appeared, and Shanxi merchants in the Qing Dynasty gambled on the next year's harvest by making sorghum and sesame oil hegemony (monopoly), which was the prototype of futures sitting on the bank.

Zhong Shi did this to reduce the risk of entering a new market, after all, he was not familiar with the rules of the London copper market, and if a delivery day (month) could not be delivered, there would be a big problem.

Since the March contract can be bought and sold every day during the trading day, there is no phenomenon of long shorting, because the bears can absorb the spot copper in the market in the early stage and wait until the main contract expires to deliver, after all, the market has spot copper delivery every day.

After struggling slightly, Andrew gave up his idea, after all, he had followed Zhongshi for many years, and had subconsciously obeyed Zhongshi's orders, and the current funds were as much as 500 million US dollars, even if 100 million was spent to reserve cash, the remaining funds were more than enough to operate the market.

Putting down the phone, Andrew continued to buy expiring copper contracts in the market, and then frequently transported spot copper from the LME's London warehouse to his rented warehouse. The process lasted until the end of April, when only 30,000 tonnes of copper were absorbed, when Bell Stone called from Chicago and ordered Andrew to halt the purchase.

The U.S. economic data for the first quarter is already out, with the 7% growth rate falling below most of the market's glasses and leaving options investors who announced on April 6 that they would give up their long power to remorse.

In the United States, the largest trading volume of futures and options of a variety is often not on the same exchange, for example, the Chicago Mercantile Exchange and the New York Stock Exchange are the largest futures exchanges, and the Chicago Board Options Exchange is the largest options. But in London. Options and options of the same symbol are concentrated on the same exchange. Examples include copper options and options trading on the LME.

LME copper options are designed in much the same way as futures, with a three-month trading volume and can be freely traded on any day before the strike month, with the first Wednesday of the strike month being the announcement date. The third Wednesday is the implementation day. The market is usually watched closely on the third Wednesday of every month. This is because the option executor enters the market and forms a new short or long position.

In January and February of '94, the market's expectations for future copper prices were obviously not optimistic, and even the bearish atmosphere was very strong. Although the bears launched a sudden attack on March 30, and the copper price also fell by $51, the bulls stubbornly pulled the copper price to $1,900 on the second trading day, making the bears' dream of executing empty, and finally forced to give up most of the short options on April 6.

It stands to reason that this should be a good opportunity for bulls to pull up, but some investors who bought long options in January gave up their power because the current copper price has not risen to the ideal price, so even under the premise of the sharp rise in the economic data of the United States in the first quarter, the trading volume of copper futures is shrinking day by day, and the lowest time is even less than 40,000 lots a day.

The market is waiting for an opportunity, a time to change the trend.

This opportunity finally came on the day the option was exercised in May!

On Wednesday, April 28, the penultimate trading day of April, Bell Stone rushed from school to his apartment at Navy Pier for the first time in the first place, where two telephones were online at the same time, dealing with Andrew and his agent in London, and his computer was showing quotations from London.

"What's going on now?" Zhong Shi used the computer to check the latest market while answering the phone of his agent Brian.

"The latest quote is 1915, which rose by $5.50 yesterday, and the volume remains around 40,000 lots." Brian gave a brief report on the current market and yesterday's trading.

On the other phone, Andrew had been listening silently, his task was to follow Bell Stone's orders to place orders, of course, using another brokerage seat, in his account was the funds of the Sky-Spatial Fund, and on Brian's side the funds of the Skyline Capital.

"Buy 100 lots, order at market price, June copper futures." Zhong Shi said. Market order is to execute at the latest market price, which is the easiest way to trade.

“haode！” Brian understood, immediately changed the line, connected to other traders, and began to match in the market.

"Andrew, you should also start to enter the market and open positions, pay attention to the changes in the market." Bell Stone instructed Andrew. For the copper matched by over-the-counter telephones, there is no real-time transaction in the market, and you can only speculate on the computer about the buying and selling situation of both parties.

Before Andrew could agree, the phone rang, and Brian said in a flat tone on the phone: "Mr. Zhong, the contract of 100 lots has been traded, the price is 1920, and the contract is on June 17. ”

"So fast?" Zhong Shi was a little unable to react at once, for him who used the computer to trade in later generations, this trading mode was very fresh, and he immediately refreshed the data on the computer and found that the current price had risen to $1920.

"If you open another 1,000 contracts, it will still be at the market price and in June." Zhong Shi decided to increase his position again, his purpose was to push up the price of copper, and naturally opened a new copper warehouse to clear the market of long swaps and empty openings.

"1000 hands?" Brian was stunned for a moment, and then said happily: "No problem, I'll do it." Then he turned around.

"Andrew, your side is gradually increasing the July contract, and jointly pushing up the current copper price. Don't forget that we have copper in our hands, so we don't have to worry about being forced to warehouse. Zhongshi said to Andrew, who had been listening.

As it is approaching May, the trading volume of contracts on each trading day in May has begun to shrink, Zhongshi is worried about liquidity, so the contracts bought are all in June, and the July contract is the second main month after June because it is far away from now.

The reason why Andrew was not allowed to buy and sell the June contract was because he was afraid that Zhongshi might be taken over by Andrew's side in the process of closing the position, so it would be like changing his left hand for his right hand. Eventually, the accumulated positions will still be closed. The stakes are much greater.

Five minutes later, Brian's call came again: "All 1,000 contracts have been filled, and the average price is $1,932." ”

"Close 1,000 lots and sell at the market price. It's the contracts you just had. Zhongshi didn't wait for Brian to finish. I couldn't wait to give the order.

"Flattened?" Brian was stunned. However, he quickly reacted and immediately set about taking action. In fact, brokerage companies can be market makers, and the rest of the orders are matched by them in the market. Telephone trading is very time-consuming, and it is not a haode transaction method at all.

1,000 contracts appeared on the market, and they were quickly sold, and the average price was still at 1932. After thinking about it for a while, Zhong Shi understood that this was the bulls' strength, otherwise the market price would definitely be suppressed by one or two prices.

"Change!" Zhong Shi thought secretly. In this way, it seems that the market's view of the market outlook is optimistic that it has the upper hand, or the bulls want to take the opportunity to exert their strength to suppress the bears, or they may have made short orders in the US copper futures market and come here to hedge. Either way, the immediate trend is upward.

Soon, however, the bears' counterattack came, and shortly after Zhongshi's 1,000-lot sell order, the market took a sharp turn, and the price of copper 3 plummeted, quickly falling to $1,925.

"Open a buy order of 1,000 lots, $1,925, still in June." This time, instead of placing an order at the market price, he placed a limit order in order to support the current downward trend.

It's just that what he didn't expect was that the 1,000-lot order was only traded for 214 hands, and the price of copper 3 rose to more than $1,925.

"Don't withdraw the rest of the list, entrust it at the market price, and see how far it can push the copper price up this time!" Faced with Brian's inquiry, Zhong Shi said decisively.

Ten minutes later, the remaining 786 long orders were finally completed, and the average price was pulled to $1,934, while the current copper price has risen to $1,937.

"It seems that the strength of the other party is very fierce, and it actually swept away the empty orders and more exchanges at this price!" Zhong Shi shook his head, trying to drive away the dizziness, this was his time to rest, because of the time difference, he could only operate at night, because only at this time, the trading volume of copper 3 in London was the largest.

"If you open another 1,000 lots, buy at the market price, it is still a June contract." Zhong Shi took a sip of coffee, and then he felt a little sober. He did this to echo the other party, but in this case, the other party is likely not to understand what he meant, or take the opportunity to change positions at a high position, in short, Zhong Shi's move is very rash and has a very big risk.

For Zhong Shi's move, Brian naturally won't remind anything, in fact, he wishes that Zhong Shi would operate frequently, so that the more commissions he can get.

This time it lasted for a long time, it took 20 minutes for all the transactions to be completed, and the average price had been pulled up to $1,938, while the market price had reached $1,941.

The situation just now has attracted the attention of the market, and the small follower orders have gradually entered the market and most of the heads have grabbed sell orders, so that Zhong Shi's hand number has not been able to be traded for a while, and it took more than ten minutes to complete all the transactions.

"Sell them all!" Seeing a green line pull up on the computer, Zhong Shi ordered Brian without hesitation. This is a good time to flee from a high position, just to trap the market followers and other bulls, now it depends on how many orders they can absorb, but also depends on the price at which the bears exert their strength. (To be continued......)

PS: Regarding the trading of copper futures, it is mainly a counterparty with the broker, and if you match it by phone, you will not have to play.