In Hong Kong, we build a global business empire

Chapter 133: A $5 Million Futures Contract

"However, Mr. Lin, the risk of futures leverage is very high. Do you really intend to make such a large futures transaction?" John Reed continued before Lin Haoran could respond.

Although John Reed did not yet know exactly how much money the Hong Kong tycoon planned to invest in gold futures, he had keenly captured the other party's ambition from Lin Haoran's casual question "how much money can shake the gold futures market".

Such people are either naive people who know nothing about the market, or wise people who are well versed in investment and hold real power.

Considering that Lin Haoran is so young and already has a net worth of billions, if it is not due to the protection of his family, then it must be the wealth accumulated by his extraordinary investment wisdom and courage.

Even John Reed himself clearly foresaw that the gold market would continue its upward trend in the short term, and the possibility of a sharp drop was minimal, unless there were some unforeseen external shocks that were enough to shake gold's upward trajectory.

As for how high gold can climb, he himself cannot accurately predict, and he believes that no one in the market can give a definite answer.

Lin Haoran smiled and responded, "That's right, Mr. John. I am confident in the future market of gold and I am not afraid of a sudden plunge. Since Citibank can provide up to 10 times leverage, I plan to invest 5000 million US dollars as a margin. I hope your company can help me buy gold futures equivalent to 5 million US dollars. May I ask if your company has any obstacles or problems at the operational level?"

Since he could get a 10x leverage, he naturally had no intention of investing all of his own capital. After all, he was in Hong Kong and still had to continue capital operations.

It is very painful when you have no money to spend.

If he could operate all this with only US$1.4 million of the US$5000 million in his hand, he could still save US$9000 million, which would allow him to do a lot of things in Hong Kong.

Leveraged funds in futures trading are essentially a financing service provided by futures companies, which is similar to a loan.

In addition to the initial 10% margin, the remaining leverage funds are actually borrowed from the futures brokerage company, which naturally comes with certain interest costs.

However, in Lin Haoran's eyes, these interests are simply insignificant compared to the huge profits brought by the rising gold prices.

Lin Haoran is very clear about the future trend of the gold market and he is very confident.

The rise in gold prices is an inevitable trend. In this globalized market, Lin Haoran’s personal investment of US$500 million alone is not enough to shake the overall trend of the gold market.

The surge in gold prices is driven by a variety of profound and complex factors.

First of all, high inflation is one of the important drivers of rising gold prices.

This year, the US inflation rate soared to a new high since World War II - 13.3%. Such a high inflation rate has made gold's status as a safe-haven asset more prominent, attracting a large number of investors seeking to preserve their assets into the gold market.

Secondly, the intensification of geopolitical tensions has also added fuel to the rise in gold prices.

Events such as the Soviet invasion of Afghanistan and the Iranian hostage crisis not only triggered global security concerns, but also intensified the market's risk aversion, prompting investors to turn their funds to relatively safe assets such as gold.

Furthermore, the depreciation of the US dollar is also a factor that cannot be ignored in the rise in gold prices.

Since the collapse of the Bretton Woods system, the fixed exchange relationship between the US dollar and gold has been broken, and the over-issuance of the US dollar has led to a sharp decline in its purchasing power against gold.

This year, the depreciation of the US dollar against gold has reached an astonishing 98.6%, which has directly driven up the price of gold.

In addition, the behavior of many central banks starting to buy large amounts of gold to increase foreign exchange reserves this year has further promoted the prosperity of the gold market.

These central bank purchases not only increase demand for gold, but also boost market confidence in the future trend of gold.

To sum up, the rise in gold prices is the result of the combined effect of multiple factors.

In the face of these macro factors, the US$500 million invested by Lin Haoran, although a large amount, seems insignificant in the entire gold market.

Therefore, Lin Haoran naturally wanted to seize the rich returns brought by such a good opportunity of the booming gold market.

"Of course, Mr. Lin, please rest assured that Citibank, as a leading financial company in the industry, is fully capable of undertaking your investment. The fact that you hold our Black Gold Card is a recognition of your wealth and investment vision. We are very honored to serve you.

However, before we officially start the operation, I must clearly inform you of the leverage effect of futures trading. A 10x leverage means that both profits and losses will be magnified accordingly.

If the gold market price fluctuates unfavorably and your account margin is insufficient to maintain your position, we may take compulsory liquidation measures to protect the interests of both parties.

In addition, in extreme market conditions, such as continuous unilateral market halts, if we are unable to close your positions in a timely manner, your principal may suffer significant losses, which may even exceed your initial investment. Although this situation is relatively rare, we still need to fully explain the risks to you.

However, please rest assured, Mr. Lin, Citibank has extremely high professionalism and rich risk management experience in the field of futures trading. We will pay close attention to market trends and communicate with you in a timely manner to ensure the safety of your investment. "John Reed said this professionally and sincerely.

After hearing this, Lin Haoran just smiled heartily: "Haha, Mr. John, I am aware of these risks. I will accept all the losses. After all, investment has risks and you need to be cautious when entering the market. However, now is the golden period for gold prices to rise. I firmly believe that it is still far from the peak. How can the gold price fall? This is the source of my confidence!" "Okay, then let me briefly explain our transaction process. First, Mr. Lin needs to open a trading account at the New York Mercantile Exchange. Then we will sign a gold futures trading contract with a clear term. You can choose to entrust us with full authority to operate.

Before the transaction begins, Mr. Lin needs to ensure that there is sufficient margin in the account to cover potential trading risks. After that, within the period specified in the contract, you can decide independently the amount of gold futures to buy or sell, and when to close the position. These decisions are entirely in your hands.

Of course, to ensure the smooth progress of the transaction, our company's professional brokers will follow up the whole process and provide market analysis and professional advice at critical moments for your reference. Our goal is to help you make more informed investment decisions. "John Reed introduced clearly.

Upon hearing this, Lin Haoran turned to look at Su Zhixue, with a questioning look in his eyes.

Su Zhixue nodded slightly, expressing his approval and affirmation of what John Reed said.

Then, John Reed picked up the phone and dialed a number in Hong Kong, apparently to verify Lin Haoran's background information.

After some confirmation, he had a more comprehensive understanding of Lin Haoran's financial strength and investment experience, and his doubts dissipated.

After all, this was his first contact with Lin Haoran, so he definitely needed to understand the other party's situation, and the bank also had to consider the risks of cooperation.

Lin Haoran is considered a celebrity in Hong Kong, and he has deposited US$1.4 million in Citibank Hong Kong. The source of this money is also normal, as it was paid by a Japanese petrochemical company.

In addition, Lin Haoran also owns two listed companies, and the market value of these two listed companies is more than 60 to 70 million US dollars.

All this demonstrates Lin Haoran's financial strength.

What Citibank likes most is to cooperate with these financially strong businessmen.

So, with the assistance of Citigroup, Lin Haoran first created an account at the New York Mercantile Exchange as an individual, then signed a contract with Citigroup, and then transferred a deposit of 5000 million US dollars to the designated account.

This futures entrustment transaction is considered completed.

At the current price of approximately US$253 per ounce, Lin Haoran's US$5 million can buy 197.63 million ounces of gold.

An ordinary futures brokerage company would not be able to handle such a huge order.

But Citibank is not an ordinary financial enterprise, but a giant-level enterprise in the financial world. Naturally, it can easily take this order.

As for how to do it, Lin Haoran doesn't need to worry about it. As long as he tells the other party his decision, Citibank will help him.

It took more than three hours to complete the transaction involving US$5 million.

"Mr. Lin, it's a pleasure to work with you. You are from Hong Kong and you will definitely not stay in the United States for long. If you have any questions, Mr. Lin, you can contact us directly or contact our branch in Hong Kong, which will provide you with the best service." John Reed followed up on this cooperation throughout the process. After the cooperation was reached, he shook hands with Lin Haoran and said with a smile.

"It's a pleasure to work with you, Mr. John. It's also nice to meet you. I hope we can have more cooperation in the future." Lin Haoran nodded.

The person in front of you will become the head of Citibank in five years, and by then he will be extremely powerful.

Therefore, establishing a good relationship with him will undoubtedly pave a broader road for your future.

At noon, Lin Haoran took Su Zhixue and others and left the Citibank headquarters building.

His purpose of coming to the United States has finally been achieved.

In fact, although there is a futures trading market in Hong Kong, its scale is much smaller than that of the New York Mercantile Exchange.

For Lin Haoran, if this bulk transaction was conducted in the Hong Kong Futures Exchange, it would be like trying to make large-scale purchases from street vendors, which would obviously not be able to meet the demand.

Therefore, he chose to come directly to the New York Mercantile Exchange. Here, even an investment of 5 million US dollars would not have much impact on the market. This is the ideal place for him to realize his investment plan.

Although he had settled things here, Lin Haoran was not in a hurry to return to Hong Kong.

In his previous life, he had never been to the United States. This time, he had a rare opportunity to come here. How could he just go back directly?

In Hong Kong, there are no major matters that need his attention for the time being. Both Qingzhou Cement Company and Wan'an Group have professional managers with more management experience, so he does not need to worry too much.

Therefore, while I am still in the United States, I must have a good time before going back.

(End of this chapter)