The Son of Finance of the Great Age

  Chapter 485 Mother Rock Fund

Before that, there was also a group of people who, like John Paulson, were looking forward to Zhongshi's visit, but compared with Paulson, these people's admiration for Zhongshi was far less than theirs The craving for the money Chung-shik had on hand came so strong because they were broke!

   This is a hedge fund that specializes in energy, called MotherRock Fund (MotherRock), and like the hedge fund that does not wither, they also focus on the natural gas market. It's just that this hedge fund is far from comparable to the Evergreen Hedge Fund in terms of the scale of fund management and the performance of previous years.

The parent rock fund only has a fund management scale of about US$2 billion, which is inconspicuous in the United States where there are many hedge funds, but you must know that its management must have enough power to persuade investors to raise a hedge fund of this size. capabilities and strategies.

  Because the hedge fund's position in the NYMEX market is too fierce, many energy funds, including parent rock funds, have been eyeing this giant, hoping to get huge profits by destroying it. This kind of behavior of wolves besieging tigers is very common in the international financial market. Unfortunately, the Evergreen hedge fund has become one of the besieged ones.

The hedge fund's strategy for this year is to bet heavily on the NYMEX October natural gas long contract, because at this time, hurricanes from the south may hit oil companies and refining equipment in the U.S. Gulf of Mexico. For alternative energy sources, once the supply fluctuates, the price of natural gas as a corresponding substitute will inevitably rise.

  In addition to this seasonal fluctuation factor, Hunter, a star trader who never fades, placed a heavy bet on both 0703 and 0704 of natural gas, hoping to make huge profits again through shoulder arbitrage.

  Due to the energy properties of natural gas, the coldest period from November to March and the hottest period from May to September are the seasons with the strongest demand for natural gas. According to the reasoning of the relationship between supply and demand, the price of natural gas is relatively high during this period, but in April and October when the temperature is suitable, the consumption of natural gas is in the off-season, and its price is relatively low. And these seasonal price fluctuations will naturally be reflected in the futures market.

   Therefore, Hunter, a trader of the Undead Flower Fund, made a huge long position on the 0703 natural gas contract and shorted the 0704 natural gas contract. This operating strategy is known as the shoulder arbitrage pattern because it exploits the differential spread between two consecutive contracts as if one shoulder is high and the other is low.

   It should be said that there is nothing wrong with this strategy, because the attributes of natural gas futures and its consumption market determine all of this. However, the non-withered flower fund's position in these contracts was too large, which caused the price difference between 0703 and 0704 to expand to 2.5 US dollars per contract. This figure is quite astonishing, and many energy funds have seen the possibility of profit.

  Mother Rock Fund is one of them!

Contrary to the Evergreen Fund, the strategy of the Mother Rock Fund is completely opposite. They short the October 2006 natural gas contract, short the March 2007 natural gas contract, and long the April 2007 natural gas contract. A completely opposite posture to compete with the Everlasting Flower Fund.

Naturally, relying on the current Mother Rock Fund, it is impossible to compete with the Everlasting Flower Fund in terms of financial resources, but the hedge funds targeting the Everlasting Flower are far from limited to the Mother Rock Fund, and include many small and medium hedge funds. A hidden hedge fund is like a shadow in the dark, which is undetectable, but may jump out at any time to deal a fatal blow to the opponent.

   But here comes the problem, before they have time to give the opponent a fatal blow, the opponent has already defeated them!

  At the end of July, the encirclement and suppression of the natural gas positions of the hedge fund of Bufaihua appeared the first victory and defeat point. There was a news that there would be a hurricane at the end of summer in the market. This news immediately doubled the confidence of the bulls who bet on natural gas in October. Soon they widened the price difference between September and October through operations, although the magnitude Not very big, only $0.5 per contract, but under the magnification of dozens of times of leverage, this small price difference became the last straw that crushed some short sellers.

   Unfortunately, Mother Rock Fund is one of them. In just half a month, they lost more than 1.4 billion US dollars, and such a huge loss is undoubtedly catastrophic for a fund like them. Investors who heard the news demanded to redeem their shares in the fund, even if some of them had punitive clauses attached. Unable to continue to add margins, they can only look around for the next home that is interested in buying their investment portfolio, hoping to repay investors' funds in this way, even though these funds are already less than one out of ten.

  Through the banking system all over the world, they finally delivered this investment portfolio to Zhongshi. And Zhong Shi, who was intending to attack the Evergreen Hedge Fund, was still troubled by the fact that he could not establish a position. After seeing this detailed investment portfolio, his first feeling was that he had just dozed off, and someone brought him a pillow. Naturally, they hit it off with the broker, and the two parties agreed on a time to discuss specific prices and details.

   "Mr. Zhong, I have admired your name for a long time!"

  When Zhong Shi’s car stopped at the entrance of the building where the Muyan Fund was located, a white man in his fifties hurried over, opened the car door courteously, and complimented Zhong Shi with a slightly astonished expression.

   Not to mention anything else, just say that Zhong Shi’s achievements in the international financial market are enough to make these people worship, but even so, it will not let them down to the point of doormen. But the current situation is stronger than others, so what the former founder and fund manager of the Materia Fund named Stephen Kullman is doing now can be justified.

   After shaking hands with this man without any pain, Zhong Shi walked towards the office of Mother Rock Fund with Stephen Kullman expressionlessly. Located in the office area on the top floor of the building, the supporting facilities of the Mother Rock Fund are almost the same as those of other hedge funds. They are arranged in a uniform location, with a variety of display screens and various communication tools. In short, all the hardware facilities that should be available There are, but there are no traders, because they have already done so.

"Sorry, it's a bit messy here, I hope you don't mind!" Stephen Coleman fumbled, and cleaned up the messy documents on the conference table casually, revealing a place that could be called complete and clean. Sweating profusely, he brought a cup of coffee, and then said to Zhong Shi apologetically.

   "It doesn't matter!" Zhong Shi took the coffee, took a sip, and asked seemingly casually, "I want to know your specific positions, prices and operating strategies on the natural gas contract."

   "No problem!" Stephen Coleman replied immediately after being stunned for a moment. Then he went out, and after messing about somewhere, he took out a thick stack of documents and handed them to Zhong Shi, and while Zhong Shi was watching, he began to explain:

"Our positions are mainly concentrated on the short positions of natural gas in October this year and March next year, and the long positions in April next year. The total contract value is about 30 billion U.S. dollars. Although we cannot maintain the margin for these positions in these months, we firmly believe in our judgment It is correct, so I am very reluctant to close it, and hope to find someone who has the same intentions as us to take over these contracts."

  Since the bankruptcy of Long-Term Capital Management, Wall Street has generally allowed a stronger consortium to take over these investment portfolios in order to avoid defaults caused by excessive derivatives positions. Of course, not all consortiums are willing to take over the position. At the beginning, 15 consortiums jointly took over the positions of Long-Term Capital Management, which was led by the US Department of the Treasury.

   But sometimes, based on different judgments of the market, some portfolios are very popular. Just like the position of the parent rock fund today, several waves of investors have come to visit, but the problem is that they can't agree on the price.

   Naturally, this part of the loss is largely borne by the parent rock fund, the question is the capital to build these positions. Some institutions naturally took the opportunity to lower the price, hoping to buy these positions at a price slightly higher than the market expected to close the positions, and at the same time bear the problem of the remaining margin. Part of it was undertaken here, but without exception, all of them were rejected by Stephen Kullman and others.

Now, what Stephen Kullman hopes most is that the other party pays the margin, and then sells these natural gas futures positions at the original price, so that the losses of the parent rock fund will be controlled in the part of the market, and he will have a profit for investors. Best explanation.

"Yes, I am indeed very interested in natural gas, and I appreciate your strategy. And most importantly, I have enough funds to play with them!" Zhong Shi nodded slowly, and said a few words Stephen Coleman spoke with great enthusiasm, but immediately sent him back from heaven to hell, "The problem is, you must have enough reasons to convince me why you would do the opposite, Do not follow the market and rules, and want to go against the market between the peak season and the off-season? If you can't convince me, then I can only say sorry to you, the deal cannot be negotiated!"

Stephen Coleman was stunned for a moment, and then his old face was flushed, and he stood up and said excitedly: "No! No! No! Mr. Zhong, what we did did not violate the laws of the market, but Today's market is controlled by the huge positions of the Everlasting Flower Fund. According to our expectations and judgments, the price difference between September and October, as well as the price difference between March and April next year, has deviated far from the traditional category .According to our data analysis on natural gas season transitions over the years, the current price difference has expanded by more than 20% compared with the average value of the past years. These are the logics of our opposition to the Evergreen Fund.”

"If you don't plan to take over, then I can only say sorry, you have missed a good opportunity to make a lot of money. You must know that although the Huahua Fund is rich and powerful, they are just like us. Once there is a huge loss After that, investors will scramble to redeem their shares, and at that time they will only be reduced to the same fate as us today, and eventually go to liquidation."

"At the end of the day, this is a sniper war, and it has nothing to do with the direction of the gas market. Of course, we didn't plan to smash this behemoth, just hoped to take a small profit from their mouths, but we failed. God, Although we are not reconciled, we must accept the jungle law of the jungle. But now it is different. If you can take over, with your strong financial resources, you will be able to take a share of the floating profit of the Everlasting Fund! "

"So, although what you are giving up now is only these tiny positions, in fact, what you are giving up today may be hundreds of millions or even billions of dollars in potential gains. Frankly speaking, even today's everlasting flowers occupy The dominant position in the market, but many institutions have been eyeing it, and you should also know what the ultimate consequences will be like for funds that expose their positions to the market.”

After explaining his strategy clearly, Stephen Kullman started to talk nonsense again, because Tianyu Fund is undoubtedly the most sincere one among the many institutions that inquired about the price, so Stephen Kullman has no reservations After honestly confessing all the thoughts in his heart, like digging his lungs out, he added some beautiful "picture cakes" indiscriminately. He hoped to be able to tell Zhongshi their strategy and potential profit through this logic and good expectations, because at the moment of liquidation, he really felt the utter despair.

Although there is no evidence to prove that there will be a large hurricane in the Gulf of Mexico in two months, the people who manipulate the price of natural gas in the market are not doctors in meteorology, nor do they have high-precision instruments like NASA, so they can only choose to believe This illusory rumor. And it was this rumor that prompted the Blooming Flowers Fund to widen the price difference between September and October natural gas prices, thus bringing down a large number of institutions that were against them in the market.

   Staring into his eyes for a long time, Zhong Shi finally nodded slowly.

  Stephen Coleman was overjoyed immediately, and shook the hand holding Zhongshi repeatedly. After delivering a speech that even touched him, he was finally completely free.

  He thought Jong-seok was convinced by his speech and logic, but that wasn't true. Hundreds of hedge funds are established on Wall Street every year, and more hedge funds "die" every year, including many well-known hedge funds. Not Withered Flower Fund is about to become one of these "dead" hedge funds.

   Thanks to book friends 131025103232773 and Xiaoqi Civilization Miracle for voting monthly!

  (end of this chapter)