Reborn, back to a small county town to become a wealthy family

Chapter 716 It begins
"Chairman, I think there might be a big market move tonight."

Before the market opened, Zhao Pengcheng was having tea with Luo Yang in the office.

Xiang Wanwan and Chu Jing sat quietly to the side, listening to their conversation.

What was the closing price yesterday?

Luo Yang didn't turn to look at the electronic display screen outside, but asked Zhao Pengcheng directly.

"83.22 yuan per barrel".

Zhao Pengcheng replied without pausing, "But last night the price once hit a low of 81.75 yuan per barrel."

"Oh?"

Luo Yang left early last night and didn't see the bottoming-out price appear. After hearing Zhao Pengcheng's report, he frowned: "Why didn't you tell me during the day?"

"The price didn't stay at the bottom for long; it climbed back up within minutes."

Zhao Pengcheng said truthfully, "I thought you'd be coming over in the next few days anyway, so it wouldn't cause any problems and I didn't bother calling to tell you."

Luo Yang remained silent for a moment, considering that the price of crude oil had not fallen below 80, which was below the warning line he had set, so he didn't say anything more.

"Since we anticipate a big market move at the opening today, let's first take stock of the funding situation."

"Okay, Chairman."

Zhao Pengcheng nodded and began his report: "Our funds are divided into two parts. One part is the private equity fund we established some time ago, with a total principal of 1.03 million US dollars. Adding the 3780 million US dollars you made from your last trading, the fund now has a total of 14080 million US dollars in its account. The other part is your personal funds, currently holding 6000 lots. We'll have to wait until after we liquidate them to do the accounting."

This initial funding amounted to only 500 million US dollars, which Luo Yang raised while he was in Guangzhou.

At that time, he used 60 times leverage, turning his principal into about 1100 million US dollars. Later, he added another 1000 million US dollars, turning the total principal of about 2100 million US dollars into 4801.2 million US dollars.

This portion of the money was recently reinvested in the crude oil futures market.

截止目前为止，用5个账户分别在99.33、99.54、99.35三个价位上各买入2000手。

The 6000 short-selling contracts represent half of the total capital, or 5% of the total position.

According to Zhao Pengcheng's report, the price of US crude oil futures before the market closed last night was $83.22 per barrel, with an average profit of over $16 per barrel.

If all positions are sold off after the market opens tonight, the profit from just these 6000 lots would be over 9600 million US dollars.

With the original principal of 4801.2 million US dollars, the funds in Luo Yang's private account will reach more than 14401.2 million US dollars, even exceeding the current accumulated funds of that fund product.

"I made about 9600 million US dollars."

After Luo Yang briefly explained his holdings, Chu Jing blurted out, "If the price of US crude oil futures continues to fall, for every dollar it drops, we'll gain an additional 6 million US dollars in profit."

For every dollar the price drops, 6000 contracts would earn an extra 6 million US dollars, equivalent to nearly 40 million RMB.
Xiang Wanwan, sitting next to Chu Jing, had a flicker in her eyes.

Luo Yang, however, was thinking about something else.

Because he knew that the lowest point of this wave of crude oil prices did not fall below the 78 mark, his psychological liquidation point was at 79 yuan/barrel. Once it got close, he would order the traders to sell all the 6000 short positions they had.

In other words, there is still a profit margin of more than 4 million yuan, which adds up to a profit of more than 2400 million yuan.

How many trading accounts do we have now?

They originally obtained 25 accounts with international trading channels from Dong Xuan, and Gray Rhino Capital holds 5 of them, making a total of 30 trading accounts.

However, the amount of funds entering the market this time is quite large, with private equity funds exceeding 1.4 million US dollars and Luo Yang's private account reaching approximately 1.7 million US dollars, totaling over 3 million US dollars, which will be amplified by 80 times leverage.
Therefore, it's better to have more trading accounts available.

"Chairman, I've recently acquired 15 more trading accounts through various connections."

Zhao Pengcheng replied truthfully: "Moreover, we have already negotiated the ratio of leverage and margin with the bank. The account opening commission is negotiated to be 0.5%, and the leverage usage fee is calculated on a daily basis (the leverage interest is paid for 3 days initially, with a minimum usage of 3 days; if less than 3 days, it is calculated as 3 days; if more than 3 days, it is deducted from the account on a daily basis), at 0.4%."

There are 15 accounts, each with a maximum limit of 500 million RMB, totaling 7500 million RMB.

"If the commission is calculated at 0.5%, it should be 375,000 US dollars." Luo Yang calculated with a slight pain in his eyes, "The daily interest from triple leverage exceeds 900,000 US dollars. This time, the funds and account usage time will be about a month, which is a lot of money!"

Standing next to him, Xiang Wanwan muttered under her breath, "At least 2700 million US dollars, that's practically robbery!"

The usage period was said to be one month, but Luo Yang didn't actually know the exact duration.

Because all he knew was that the price of US crude oil futures would fall to around $78 per barrel in the next few days, and then slowly rise to its peak in mid-September, and that the peak price would not exceed $120 per barrel.

There are two months in between, from mid-July to mid-September.

Luo Yang will have to wait and see how crude oil prices go. If the price breaks through the 110 yuan mark a month later, then he won't need to take the bank's financing anymore, because the remaining upside potential isn't worth the high price he has to pay.

You can withdraw the leveraged investment and use your principal.

Moreover, because leveraged trading is used, the account will be monitored in real time, since they need to prevent margin calls from affecting their leveraged trading.

Luo Yang didn't want the bank to see that he was clearing out his stock at a price of 120 yuan per barrel.

"Chairman, there are less than five minutes left before the market opens."

Just as he was thinking, Zhao Pengcheng glanced at the time on his watch and reminded Luo Yang, "What do you think, should we..."

Whether it's the stock market or the futures market, there's often a big price movement at the opening.

"Let's go to the trading room and keep an eye on things."

Out of caution, Luo Yang stood up, pushed open the office door, and led the way into the trading room.

Time ticked by, second by second.

As expected, the US crude oil futures market was volatile from the very beginning of today's trading.

A long bearish candlestick appeared, and in less than three minutes, the price of crude oil plummeted from the opening price of 83.22 US dollars per barrel.

83.01, 82.85, 82.34
This downward trend actually broke through the 80 US dollar mark, reaching 79.82 US dollars per barrel before starting to consolidate sideways.

"Is it going to hit rock bottom tonight?"

Luo Yang stroked his chin, lost in thought.

Because he was so focused, he didn't realize that everyone's eyes were on his face.

To sell or not to sell?
In just over ten minutes, each barrel yielded a profit of over 3.5 million yuan. If someone else were in charge, they would have ordered the entire stock to be sold off long ago.

However, Luo Yang has not yet issued any instructions.

"Chairman"

Even Zhao Pengcheng used trembling voice to remind his boss.

"Oh"

Luo Yang snapped out of his daze, glanced at the prices on the market, and then issued a trading order: "Sell everything at 79.82 yuan!"

As soon as he issued the order to liquidate the positions, several traders instantly got to work.

Amidst the rapid clatter of keyboard clicks, all 6000 short positions were successfully executed.

Buy 2000 lots at a price of US dollars per barrel of 99.33 US dollars and sell them at a price of US dollars per barrel of 79.82 US dollars, making a profit of US dollars per barrel of 19.51 US dollars, for a total gain of US dollars of 3902 million US dollars.

Buy 2000 lots at a price of US dollars per barrel of 9954 US dollars and sell them at a price of US dollars per barrel of 79.82 US dollars, making a profit of US dollars per barrel of 19.73 US dollars, for a total gain of US dollars of 3946 million US dollars.

Buy 2000 lots at a price of US dollars per barrel of 99.35 US dollars and sell them at a price of US dollars per barrel of 79.82 US dollars, making a profit of US dollars per barrel of 19.53 US dollars, for a total gain of US dollars of 2870 million US dollars.

From buying the shares about ten days ago to selling them all today, Luo Yang's private account has accumulated 11718 million US dollars.

On average, they earn nearly 7000 million local currency per day.
(End of this chapter)