Natural gas futures contracts are traded on both NYMEX and ICE exchanges, and the underlying amount is almost the same, with the slight difference being that the New York Mercantile Exchange is physically delivered, as Louisiana has a system of natural gas pipelines throughout the United States, while the Intercontinental Exchange does not support physical delivery.

A standard natural gas contract with a unit of 10,000 mmBtu (million British thermal units) is quoted in US dollar cents per million British thermal units, with a maximum price swing of $3 per million British thermal units per day in each month, or $30,000 per contract. After breaking through this upper and lower price limit, the circuit breaker restarts the transaction for five minutes, increasing the upper and lower limits by $3 again, and if there is a circuit breaker again, this procedure is repeated.

Because of its hedging function, natural gas contracts in NYMEX are particularly long, with contracts traded in each month from the current year to the following 12 years. However, with the exception of some natural gas producers who trade on the far month, most of the other participants are trading on contracts for the current year and the next year, which are among the most traded and liquid month contracts.

But now, the situation of some of the month contracts that should be more liquid has been broken, because the market is massively held in one institution, which is the position of the hedge fund.

"See the spread between the 0703 contract and the 0704 contract? $2.5, oh my God, what a staggering number, the spread between one lot of contracts is $25,000! ”

In the trading hall, Hu Pingzheng was giving an exciting speech. The content is naturally aimed at non-withered positions. Because of the increasing position, buying the March contract and selling the April contract at the same time makes the price divergence between the two more and more severe, which traders with a little common sense can realize this situation, and all Hu Ping has to do is to attack this situation.

"We now have about 20,000 lots of 03 and 04 on hand, which is about the same amount each month based on hedging considerations. It is precisely because the opponent is constantly widening the spread that the former holders of these positions can no longer maintain their current size, but they are lucky, and their opponents should be lucky, because these positions have fallen into our hands! ”

Traders are nervously preparing for their pre-market work. While pricking up his ears to listen to Hu Ping's speech. They have sensed what their boss is going to do, and now is the time for Hu Ping to cheer them on.

"Damn, although there will be a price difference between the two months because of the quarter. But it will definitely not be strict to this point. Now all we need to do is. Short the March contract as much as possible. Buy the April contract to narrow the spread to a reasonable range. ”

After first stirring up people's hearts, Hu Ping gave a strategy for operation. He knows what a professional team he is. As long as the general direction is given, all that remains is a matter of execution.

Because there has been no revolutionary breakthrough in mining technology, so far, the price of natural gas futures has remained around $6 to $9, and even rushed to $15.77 at the highest. Later, due to the discovery of more and more reserves of natural gas and the rapid innovation of mining technology, the relationship between supply and demand of natural gas has undergone fundamental changes, and the price of futures has been cut in half, and even fell to a price of $1.90 for a time. The risks and benefits of market volatility have also decreased, so much so that the currently thriving natural gas market has shrunk considerably, and many funds have opted out.

But now, the opportunity is in front of us.

"7.93,0703 contracts, sell 100 lots, 5.43,0704 contracts, follow up and buy, test the market's reaction first!" After carefully studying the market, Hu Ping decisively gave a price test first.

Since the non-withering fund is doing shoulder arbitrage, if you want to defeat the other party, you must reduce their arbitrage space as small as possible. This shrinkage is conditional on the suppression of the 0703 contract and the lifting of the 0704 contract, that is, it must be achieved by starting with the contract in two months, and a single short sale and bullish on a certain month cannot achieve such an effect. Therefore, while selling, the other side should also follow up and buy at the same time.

After 100 contracts of 7.93 US dollars entered the market of 0703, it quickly caused a small commotion, because such a pending order is not too big and not too small, and the key is that the market does not understand its intentions. However, it was soon discovered that almost at the same time, a buy order of the same amount was also placed in 0704, and the difference between the two is the difference in the current market.

"Is this arbitrage?" The first reaction in many people's minds is this, but because the direction is completely opposite to the current market trend, they soon denied their ideas, but if it is said that it is intended to snipe without withering, it is even more impossible, what can a contract of only 200 hands do?

Soon, the 200 contracts were drowned in the scrolling trading columns, and there was not even a single wave, because the lot size was so small that the two-month contract only fluctuated slightly by $0.15, and the market quickly recovered to the previous spread again.

"Sure enough, it was expected!"

After carefully looking at the changes in the K-line chart, Hu Ping crossed his hands and hugged his chest, and said without a trace of emotional change. Then he snapped his fingers to the sky and instructed the trader: "Continue with the strategy just now, follow up on the market price, come four more times, and remember, don't close the position!" ”

Although it is rumored that the Withering Fund has accumulated a large number of positions in these two months, no one knows what the exact number is. The most important thing is that if there really is such a huge position, I believe that so far, their floating profit has reached a very considerable number, and with these floating profits alone, the withered fund can settle most of the funds in the market against them.

So even though Hu Ping currently has a huge amount of money in his hands, he doesn't dare to show up and go against them lightly. Because firstly, his funds are not comparable to the funds of the withered fund, and secondly, when the market is not seriously favorable. There is no way to tell the difference between victory and defeat by relying on financial competition alone.

Soon the second two months of 100 lots in different directions appeared on the market again, but this time it still did not attract the attention of the market. But for the third, fourth and fifth times, after these pending orders appeared one after another, institutions in the market gradually began to pay attention.

If the position is not closed, the other party has accumulated a position of 1,000 hands this time, and the direction is exactly the opposite of the current market development, which has to be said to be a strange appearance in today's market. For a position of 1,000 lots, the amount of margin has reached millions of dollars, and it is certain that the other party has at least tens of millions or even more funds to maintain this position. It's a big customer!

Some traders associate it more. Because they have long heard that someone is encircling and suppressing the natural gas position that does not wither. And this situation has appeared in the market today, whether they have sounded the horn of attack, or simply issued a provocation to the non-withering fund. It depends on the subsequent direction of the market.

In a word. After five consecutive rounds of 1,000 contracts. Rumors began to rise in the market, but soon the news was drowned out in the retaliation that came with the Withering Fund.

"Who is this, I don't know if it's alive or dead. They want to go against us! ”

Inside the Calgary office, Bond. Hunter looked at this qiē with great anger, and finally couldn't help but let out a roar, and the roar that came out like a beast being injured made everyone's hearts go awry.

and Bond. Hunter has been with him for a long time, and these people have long been clear about his personality and character, full of confidence, extremely arrogant, and empty-eyed. Of course, people with this aggressive personality abound on Wall Street, but there are very few people who can really show it, after all, not everyone can do it like Bond. Hunter has performed like this.

Now that Hunt is enraged, traders immediately think about what the consequences will befall the other party.

"Pull up the price of the March contract, suppress the price in April, and widen the spread between the two, and I want the market to see what will happen to the person who deliberately opposes me!"

After venting, Hunter calmed down almost the next moment, and if an outsider saw this instantaneous role change, he would definitely be overwhelmed for a while. Traders who are familiar with Hunt are accustomed to this, and they have long been sitting in front of the computer, waiting for Hunt to issue instructions after calming down.

Soon after Hunter issued a trading order, traders began to crack on the keyboard and start placing orders on the electronic disk. It didn't take long for a series of buy orders of dozens of lots to appear on the NG0703 contract on the NYMEX, which drowned out the sell orders at this price within a few minutes, and the price of the 0703 contract rose by $0.5 in the frenzied buying market. Almost at the same time, almost the same number of sell orders were also hung on the market of the 0704 contract, and people were stunned that although the price was hit to $5.03 not long after, and the spread between the two widened by $0.9, the sell orders did not have the slightest tendency to close, and hundreds of sell orders were still placed near $5.00, and they wanted to break through the $5 mark in one fell swoop.

This qiē happened in just five minutes, and the spread of $0.9 meant that the institution that held 1,000 lots just now lost $9 million, but fortunately this is not a market that requires margin at any time, otherwise the institution would have been liquidated almost in these few minutes.

The market is dumbfounded!

However, at this time, the price spread of up to $3.4 in adjacent months also made many investors see the possibility of profit, and they began to sell short in March and buy April contracts. In the face of the surging funds, the funds of the non-withered fund that only want to teach each other a lesson choose to retreat, and at the same time obtain a part of the profits, they began to withdraw in an orderly manner, and after more than half an hour of entanglement, the two sides returned to the same running line again, and the price difference between the two months remained at about 2.5 US dollars.

Then the market began to trade tepidly, and dozens or hundreds of lots of buy and sell orders never appeared again. But traders who have lived through the scene just now know what happened in the market.

"Sure enough, it's a great character!"

Hu Ping touched his smooth chin and praised sincerely, just now he just tried it a little, but he suffered such a fierce counterattack from the other party, if his follow-up funds were insufficient, I am afraid that the broker would have called to call to call to pay the margin.

But the more the other side reacted so violently, the more it shows that the other side has really made a big bet on these two months, and no one can covet it. And it is precisely based on this judgment that makes Hu Pingyue interested in having a good time with the other party!

……

"Did they flatten it?"

After closing the deal, Bond. Hunter quickly packed up his belongings and walked towards the door as soon as he could, but as he reached the door, he suddenly stopped, pulled a trader, and asked a clueless question.

"Probably not!" The trader frowned, blurted out without thinking, "According to the open interest announced today, a total of 1,724 open contracts have increased in the past two months, an increase of 1,892 contracts from the previous day, I think they should not have closed them!" ”

Bond. A hint of gloom flashed through Hunter's heart. (To be continued......)

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