Chapter 464: Many somersaults

The Hang Seng Index is an indicator of changes in Hong Kong blue-chip stocks and is also a widely watched index in Asia.

The Hong Kong Futures Exchange launched the Hang Seng Index Futures Contract as early as May 1986, and then launched the Hang Seng Index Options Contract in March 1993.

By last year, the trading volume of Hang Seng Index Futures reached sixth in the world.

The biggest advantage of Hang Seng Index Futures is its high cost-effectiveness and low trading fees.

Each Hang Seng Index futures and options contract is equal to a basket of high-market stocks, and only once a commission is charged for HKD 50 per transaction, so the transaction cost is low.

Investors only need to pay a deposit, that is, margin, when buying and selling Hang Seng Index Futures and Options contracts, which only account for a part of the contract’s face value. The leverage effect of each contract of Hong Kong HSI Hang Seng Index Futures is about 16 times. For example, the Hang Seng Index Futures is now at 10,000 points, and the value of each point is HK$50. That is to say, just use HK$10,000506.532,500 to make a Hang Seng Index Futures contract. On the premise of making a profit of HK$50 per point, this method allows investors to make huge profits without spending too much money.

Of course, if the estimate is wrong and the direction of the stock market rises and falls is the opposite of your prediction, it will be a life-threatening loss.

Therefore, when Chen Mingluo said that he would almost spend $2 billion in to short the Hang Seng Index, everyone was a little shocked.

I have seen someone who is dying, but I have never seen someone who is dying like this!

Now a dollar is about 7.75 Hong Kong dollars, and 2 billion US dollars is equivalent to 15.5 billion Hong Kong dollars. If you buy Hang Seng Index futures, you can buy almost 470,000 short-selling contracts for the Hang Seng Index. This is indeed a bit bigger.

"Do you want to be more cautious?" someone asked immediately.

"How about doing a hedge?" someone asked.

"Why don't you invest half of it and you'll have to be more secure?" someone suggested.

Chen Mingluo could understand everyone's doubts. After all, if such a large amount of funds are poured into it, God knows what will happen. If something unexpected happens and billions of dollars are gone, it will be dead. You must know that this is not impossible in a battle of this level.

"There is nothing to consider, just follow my opinion." Chen Mingluo did not explain much, but just asked everyone to follow the implementation. "Fatty white guy came to you to help me with the operation. As for how to make a decision, everyone doesn't need to worry about it. I will naturally be responsible for my own money."

Seeing him say this, everyone has nothing to say. After all, it is their own money. Guoan just borrows chickens to lay eggs. If you lose money, you won’t lose money. If you make money, just share the money.

Chen Mingluo and everyone discussed the operation strategy roughly. They felt that there was no problem, so they ordered each to keep their posts carefully and start entering the market in large quantities just when the market opens tomorrow.

The short orders of 470,000 are still very scary. Soros and others have been paying attention to the changes in the Hong Kong stock market, futures market and foreign exchange market. They have mobilized about 80 billion US dollars in order to spread the situation today. Now they suddenly discovered such a large-scale short selling of the Hang Seng Index. They were shocked and their intuition was that someone had rushed in again.

However, for international speculators, short selling of Hang Seng Futures Index is consistent with their own interests. I believe that the other party has also seen their operating intentions, so they want to join and form a joint force.

Judging from the scale of the other party, Soros judged that the scale of the other party's funds should be around 10 billion US dollars, otherwise it would be unlikely that he would use such a large amount of money to enter the market and short the Hang Seng Index. As a result, he felt that the time for the launch was ripe, so at the order, his traders immediately began to take action.

International speculators began to short stocks and futures indexes in the securities market, greatly suppressing the Hang Seng Index. Within just a few days, the Hang Seng Index fell sharply from around the 10,000 point mark to 8,000 points, and had a momentum of directly reaching 6,000 points.

At this critical moment when the storm is about to come, negative news in the securities market is also flying everywhere.

In early August, speculators hyped that the RMB would depreciate by 10. Among them, the RMB black market transactions in Shanghai, Guangzhou and other places had fallen to around 9.5 yuan for one dollar.

Speculators spread rumors that the RMB will depreciate, just to use this to influence people's confidence in the Hong Kong dollar. In addition, speculators also hype rumors such as instability of mainland banks. The purpose is to create psychological conditions for them to snipe the Hong Kong dollar, and their methods are truly omnipotent.

An overseas fund even offered options for decoupling Hong Kong's exchange rate on August 12, 1998. Speculators took the opportunity to spread rumors, threatening that the Hong Kong dollar would be decoupled from the US dollar and depreciated by 40, and the Hang Seng Index would fall to 4,000 points. The purpose was nothing more than to disrupt people's hearts, create a state of chaos, and then take advantage of the opportunity to take advantage of the situation.

While lowering the Hang Seng Index, international speculators have accumulated a large number of short positions in the Hang Seng Index futures market. For every 1 point of the Hang Seng Index falls, each short position contract can earn HK$50.

When international speculators were working on the stock market, futures market and foreign exchange market, the Hong Kong Monetary Authority was not idle either.

After all, Soros and others have visited Hong Kong three times, each time causing relatively large economic losses to Hong Kong. Their misconduct in Thailand and Malaysia have also caused devastating blows to the economies of these countries, which can be said to be a bad person.

Therefore, after analyzing and studying the situation in other Asian markets, in order to maintain the stability of Hong Kong's financial market, the Hong Kong SAR government decided to transfer huge sums of money to fight these crazy international speculators.

It can be said that this is a life-and-death financial war with money, wisdom and courage as weapons. Whether it is the challenger or the challenger, they all know the benefits and risks contained in their success or failure.

Chen Mingluo and others had nothing to do, and now they were just waiting for profits.

In addition to letting his subordinates stare at the plate and collect market news, Chen Mingluo himself accompanied Yang Ji'er around Hong Kong, from the Man Wu Temple on Hong Kong Island, the Tsun Hou Temple in Causeway Bay, the St. John's Cathedral, to the Wong Tai Sin Temple in Kowloon, the Houwang Temple, the Tsun Mountain Guanyin Temple, the Kowloon Mosque in Sha Tin, and then to the Wanfo Temple in Chegong Temple, the Pengying Fairy Hall, the Banyuanchun, the Daofengshan Christian Church, and the Bamboo Zen Temple in Tsuen Wan, the Tsun Hou Temple in Tsuen Wan, the Tsun Hou Temple in Longmen, the Qingshan Temple in Longmen, the Qingsong Temple in Miaofa Temple in Yuen Long, the Lingdu Temple in Yuen Long, the Yunfu Fairy Temple in Sai Kung, the Tsun Hou Temple in Oyong Chegong Temple, the Tsun Hou Temple in Lantau Island, the Tsun Hou Temple in Cheung Chau Temple, the Tsun Hou Temple in Lantau Island, the Tsun Hou Temple in Cheung Chau Temple, the Tsun Hou Temple in Pingzhou, etc., and they were left everywhere.

At the same time, unlike their freedom, there is war everywhere in the Hong Kong market.

On August 5, speculators sold more than 20 billion Hong Kong dollars in one day.

The Hong Kong Monetary Authority is not willing to be outdone. Instead of the past passive practices, it uses Hong Kong's fiscal reserves to absorb them in full, stabilize the foreign exchange market at the level of 1 USD to 7.75 Hong Kong dollars, and the interest on lending in interbank markets has only increased slightly.

On August 6, speculators sold more than 20 billion Hong Kong dollars. The Financial Administration made another move, not only to accept all the orders, but also deposited the absorbed Hong Kong dollars into the Hong Kong banking system, thus playing a role in stabilizing interbank lending interest and preventing that once the interest rate increases, the stock market will inevitably fall.

On August 7, the stock market fell sharply due to poor performance of some blue-chip stocks that have announced their interim results, causing the Hang Seng Index to fall 212 points throughout the day, a drop of 3.

In the following five trading days, the Hong Kong SAR government continued to adopt the method of absorbing Hong Kong dollars to stabilize interbank interest rates and thus achieve the goal of stabilizing the stock market. However, as speculators shorted heavily in the stock market, the Hang Seng Index eventually fell to a low of around 6,600 points.

On August 13, after the Hang Seng Index was suppressed to 6660 points, the Hong Kong government began to organize Hong Kong funds to enter the market and asked the central government for help. President Hong immediately instructed mainland funds to enter the market and launched a battle with his opponents for the August stock index futures contract.

Speculators in countries represented by Soros need to suppress the index to cooperate with shorting futures indexes, while the Hong Kong government must hold on to the index, forcing speculators to short-sell contracts at high levels in advance to prevent cashing out as much as possible before the end of August.

At this time, Chen Mingluo had achieved his goal and ordered everyone to change the market with all their might, and a few more flips came.

"Before the Hang Seng Index falls to 4,000 points?" someone asked with a smile.

At this time, Chen Mingluo had already made a huge profit, and his capital volume increased to about 6 billion US dollars. His sudden change of trading immediately caused quite terrifying results.

As Chen Mingluo said, after entering the market, the Hong Kong government immediately bought a large number of short-selling August stock index futures contracts by international speculators, pushing the futures from 6,610 points before entering the market to 7,820 points on the 24th, which is higher than the average position building price of 7,500 points for investors. It can be said that it has achieved a preliminary victory.

After the closing of the market on the same day, the Hong Kong government announced that it had used foreign exchange funds to interfere in the stock market and futures markets.

The sudden entry of the Hong Kong government into the market was something that Soros and others did not expect. They absolutely did not expect that the Hong Kong government had given up the principle of free economic port that it had been pursued and actually entered the market with government funds to intervene. Although this possibility has been discussed seriously before, they generally believed that it was not realistic, but they did not expect that this situation really happened now.

Caught off guard, the national speculators suffered heavy losses.

The next day, the Hong Kong Special Administrative Region Government announced its official participation in stock market and futures market trading.

In order to maintain the stability of the Hong Kong dollar, the Financial Administration of the SAR Government brought huge foreign exchange funds into the stock market and futures markets, and directly confronted speculators.
Chapter completed!