Chapter 359 (1/2)

As of January 1990, the proven oil reserves in the Gulf region accounted for 65% of the world's total oil reserves, while providing 43% of the world's daily oil demand. Among them, Iraq and Kuwait are the only two countries. Even after decades of exploitation, their oil reserves still rank in the top ten in the world.

It can be imagined that the turmoil in the Gulf region will have a strong impact on the world's crude oil supply.

When the news of Iraq's invasion of Kuwait came on August 2, the international crude oil price began to soar. By the end of Friday, August 3, the international crude oil price had soared to US $27.63 per barrel, up 29% compared with that before the outbreak of the war.

And it's just the beginning.

Simon's memory, the Kuwait war led to the highest international crude oil prices to 41.07 U.S. dollars.

Many things are not so sure because of the influence of Simon, a big butterfly. However, Simon believes that the impact of the international crude oil price on the $40 high will not be too big.

New York.

Cersei capital headquarters in midtown Manhattan.

Although it is Sunday, cersei capital headquarters is still crowded today.

In addition to the loss of some profits due to the untimely clearance of short positions in the last week before the outbreak of the war, cersei fund management company's layout on various types of crude oil futures contracts basically met expectations.

By the outbreak of the war on August 2, cersei fund management company had established a huge long contract with a total of 25 billion US dollars in the mainstream Brent crude oil futures and WTI crude oil futures, as well as the surrounding light diesel oil futures, unleaded gasoline futures, high sulfur fuel oil futures and other types of crude oil futures.

Cersei capital started to build its position at the end of June, with the international crude oil price as the benchmark, ranging from the lowest price of $13 to $20 the day before the outbreak of the war.

Starting next week, cersei capital will gradually clear its long contracts.

In fact, it has been going on since the day of the war.

In fact, it's because I have to take the initiative to do so.

Simon wants to start clearing when the price of crude oil approaches or reaches $40, but it's not realistic at all.

As we all know, futures trading is a zero sum game. If someone makes money, someone will lose money, and the profit and loss are equal.

For example, cersei capital itself, if this time it goes in the wrong direction and establishes a crude oil futures short position of up to US $25 billion, then once the war breaks out, the international crude oil price will soar from US $20 before the war to the highest US $40, with an increase of 100%. According to the futures contract, cersei capital will theoretically lose us $25 billion to the other gambling party.

Cersei's capital account, however, has less than $6 billion.

If the Bulls insist that cersei capital can refuse to close the position within the loss range, cersei capital can only default.

The default phenomenon in futures trading is very rare, but it is not without, such as the sharp fluctuation of crude oil price caused by the sudden war.

Perhaps before the outbreak of the war, some futures speculators had the hope that they could continue to supplement the margin in case of the outbreak of the war. After the outbreak of the war, the hope was shattered, and many futures speculators directly chose to give up. Some speculators who took nearly 20 times of high leverage directly defaulted on the day of the outbreak of the war.

However, the default of speculators does not mean the default of futures contracts.

This is because there are two guarantees between futures brokers and futures exchanges.

When the futures speculator's account funds are insufficient to make up for the loss, as the Party of transaction guarantee, the futures broker will make up the difference to ensure the transaction.

When the funds of the futures broker can not ensure the completion of the transaction, the futures exchange will use its own reserve funds to supplement.

In the most serious case, in order to avoid the collapse of the futures trading system, the national level will participate in the rescue.

In the stock market crash of 1987, the S & P 500 index futures set out the U.S. national rescue measures because of the huge fluctuation of Black Monday. On the night of October 19, through the direct intervention of the federal Treasury Department, the major banks of the United States were able to provide huge funds to the Chicago Mercantile Exchange to avoid the default of futures trading.

Because of the sudden outbreak of the Kuwait war, this time, crude oil futures trading also touched the exchange level.

This also means that if it is a US $5 billion bet on US $5 billion, the winner will not only get us $5 billion from the speculators, but also a large amount of money subsidized by futures brokers and futures exchanges to ensure the delivery of contracts.

In the conference room of cersei capital headquarters.

At the end of the day's meeting, it was evening, and the summer sun broke into this office building with excellent view through the cracks of Manhattan high-rise buildings.

Sending everyone away, Janet got up and sat down in Simon's arms, humming that she was tired.

Simon smiles and helps her to knead and relax, saying: ”after this time, maybe many futures brokers will close down directly?”

Since the big market has spread to the exchange level, the intermediary brokers are not immune. They often need to fill a large amount of money to ensure the delivery of the contract. Comparatively speaking, the profits of bulls will not feed back too many brokers. They can only get a commission they deserve.”It's estimated that there are hundreds of them,” Janet said, squinting lazily. ”In addition to the large brokers supported by the parent companies such as Goldman Sachs, Morgan and Citigroup, many small and medium-sized independent brokers are basically closing down.”

Few speculators can directly cooperate with the futures exchange, which usually requires futures brokers to provide collateral.

There are many types of futures brokers, and the larger ones are usually attached to the futures brokerage departments of large investment banks. However, there are numerous small and medium-sized futures brokers in North America and all over the world.

Simon's memory, because of this big market, countless futures brokers all over the world have declared bankruptcy, and the whole industry will not recover for many years in the future.

What's more, this incident also caused another serious consequence, the sharp shrinkage of crude oil futures trading.

For a long time, there won't be many short positions in the market. Therefore, cersei capital can't build large-scale positions, so it can only turn its attention to other fields.

With the outbreak of the war, stock markets around the world have fallen sharply.