A $50 million margin call? I'll short Wall Street.

[Beijing, headquarters of a major state-owned airline, top-floor conference room]

Liu Jianming glanced at the Blancpain watch on his wrist, his brow furrowing very slightly.

It's 3:15 PM. This internal meeting, which was originally planned to last only half an hour, has already exceeded its allotted time by a full forty-five minutes.

As the general manager of this super state-owned enterprise that owns hundreds of wide-body passenger aircraft and operates the country's core routes, Liu Jianming's daily schedule is calculated down to the minute.

But at this moment, he could only patiently sit in the large leather swivel chair and look at the middle-aged man opposite him, whose eyes were bloodshot and whose emotions were obviously out of control.

Wang Wenyuan, Deputy Director of the Office of the State Council Coordination Group.

"Director Wang, please have some water first."

With an impeccable, gentle smile befitting the head of a state-owned enterprise, Liu Jianming personally pushed the celadon teacup in front of him toward Wang Wenyuan.

"You just flew back from New York, still jet-lagged, and came straight here. Our entire company is deeply moved by your sense of responsibility. But..."

Liu Jianming abruptly changed the subject, his tone taking on a condescending professional air:

"Our finance department colleagues, along with two external experts from the Chinese Academy of Social Sciences, have been working on this fuel hedging contract for three whole months."

"This isn't like buying cabbage, Director Wang. This is a financial derivative involving tens of billions of dollars in notional principal. It's backed by rigorous mathematical logic."

Liu Jianming sighed inwardly.

He actually found people like Wang Wenyuan quite annoying.

A bureaucrat with a background in macroeconomic coordination and administration went to New York, listened to some con artist's words, and came back thinking he knew more about Wall Street than Goldman Sachs.

International crude oil prices have now broken through $115 a barrel!

The amount of aviation kerosene that airlines burn every day is like burning US dollars directly.

If he doesn't quickly sign this "zero-cost collar option" hedging contract to lock in the oil price ceiling at $130, who will explain the staggering losses in the year-end financial report to the State-owned Assets Supervision and Administration Commission? Will Liu Jianming still have his job?

"Mr. Liu, I don't care about mathematical logic!"

Wang Wenyuan didn't even touch the cup of tea. He grabbed the thick draft English contract, which was over a hundred pages long, and flipped directly to page forty-seven, which he had circled countless times in red pen.

His fingers trembled slightly with excitement as he jabbed heavily onto the paper.

"Look at this! 'Floor Trigger' (price floor trigger clause)!"

Wang Wenyuan's voice echoed in the conference room, hoarse with an almost desperate tone:

"If oil prices fall below $80, you will not only fail to benefit from the lower oil prices, but you will also have to pay Goldman Sachs double or even triple your notional principal in cash!"

"Furthermore, there are no stop-loss orders! There's no maximum loss limit! This is unlimited liability!"

Wang Wenyuan suddenly raised his head and stared intently at Liu Jianming:

"Mr. Liu, this is a bottomless pit! I demand that you immediately terminate the contract, or you must get Goldman Sachs to add a 'knockout' clause, sealing off the bottom line for further declines in black and white!"

There was a two-second silence in the conference room.

Liu Jianming didn't say anything; he just glanced at Zhang Kai, the financial director sitting next to him, out of the corner of his eye.

Director Zhang immediately understood and coughed, adjusted his gold-rimmed glasses, and spoke.

"Director Wang, we considered your concerns at the very beginning of the design process."

Director Zhang opened the PowerPoint presentation in front of him, and the laser pointer shone on the screen on the wall, which was covered with dense Monte Carlo simulation curves and Greek letters.

"But you may not be familiar with derivatives pricing. The reason Goldman Sachs can provide us with 'zero cost'—meaning we don't have to pay a single penny in premiums to lock in the $130 cap—is that we have to give up the potential gains below it."

Director Zhang's tone carried that kind of arrogance that laymen find extremely offensive, the arrogance of a technocrat:

"As for what you said about it falling below $80..."

Director Zhang smiled.

"Director Wang, there is inflation all over the world right now, the US dollar index has fallen to a record low, and demand in emerging markets is booming. Goldman Sachs, Morgan Stanley, Citigroup, and all the top research reports on Wall Street are bullish on the dollar to $150 or even $200."

"Our risk control model has run 10,000 stress tests. Do you know what the probability is of it falling below $80? 3.2%."

"This is a theoretical tail risk. In practice, it is almost impossible for it to occur."

"Impossible?!"

Wang Wenyuan slammed his hand on the table with a loud "bang," which made the lids of the teacups on the table jump up.

Everyone in the conference room was startled.

Slamming one's fist on the table at meetings within the system is an extremely rare and seriously inappropriate act.

"What makes you think it's impossible? Based on Goldman Sachs' research report?!"

Wang Wenyuan's eyes were frighteningly red. He remembered the cold yet compassionate look in Lu Ze's eyes when he looked at him in that dimly lit teahouse in Chinatown.

"I just met a hedge fund manager in New York who has actually killed people on Wall Street and just made 700 million in the Bear Stearns crash! He told me personally that Goldman Sachs doesn't care about oil price fluctuations at all; they're just building a pumping station! The moment you sign that contract, you become the counterparty to short sellers worldwide!"

"Just add a stop-loss line! Just one! If the dam breaks down below, at least we can save one life!"

Wang Wenyuan was practically begging.

Liu Jianming's face darkened completely.

He originally wanted to maintain a polite facade, but Wang Wenyuan's hysterical attitude had seriously challenged his authority as the top leader.

"Director Wang."

Liu Jianming's voice was no longer gentle, but carried a cold, hard official air.

"I don't know which 'friends' you met in New York or what 'insider information' you heard. But what I do know is that we are a large company that is subject to national audit."

Liu Jianming leaned forward, placing his hands crossed on the table:

"You mentioned adding a stop-loss line. Okay, Director Zhang, tell Director Wang, if we add an absolute stop-loss 'knock-out barrier' clause as he suggested, how much option premium will Goldman Sachs charge?"

Director Zhang quickly pressed a few buttons on the calculator: "Mr. Liu, based on the current implied volatility, if we want to lock in unlimited liability downside, we can no longer create a 'zero-cost' structure. To buy such a large put protection, we need to immediately pay Goldman Sachs approximately $40 million in upfront option premiums."

Liu Jianming turned his head and looked at Wang Wenyuan with a look of contempt that seemed to say, "Look how ridiculous you are."

"Did you hear that, Director Wang? Forty million US dollars. That's almost three hundred million RMB."

"You expect me to simply transfer 300 million yuan from the group's account and give it away to the Americans today for a 'theoretical risk' that Goldman Sachs and domestic experts believe has only a 3% probability of occurring?"

Liu Jianming raised his chin slightly, looking aggressive:

"If oil prices rise to $150 by the end of the year, these 300 million will be wasted! When the National Audit Office comes to audit the accounts and asks me why these 300 million were wasted, what am I supposed to say? That Director Wang of the Coordination Office listened to a young man's 'feeling' in New York, so I spent 300 million to buy a placebo?"

"Do you dare sign this? If you dare, I'll do as you say today!"