Chapter 100 Abnormal Market Performance

"Jenny, I'm off to school!"

"Alright, have a good day. I talked to your grandpa yesterday, and we agreed that when you're on break, you'll come back to Texas. Melissa and Anna are also coming back."

"Okay, I'll take the car for maintenance this afternoon and get a new tire."

After returning from Atlanta, the winter break was not far off. Christmas is like the Spring Festival for foreigners, usually starting around mid-December. Thanksgiving falls at the end of November, so this time, they would only have a little over two weeks of school before the break.

Upon hearing that Jenny had already spoken to her grandpa in Texas, Carter knew it was time to start preparing for the trip.

"Do we need to bring any gifts for grandpa and grandma?"

As Carter changed his shoes at the entrance, he asked.

"No, everything is fine. Your grandpa was thrilled to hear you're coming back. He said he'll take you hunting with your two uncles when you get back, and maybe you'll bring back a wild boar for him to roast. He might even be in town buying barbecue sauce already."

Jenny chuckled as she walked over and hugged Carter, feeling nostalgic as she looked at her grown-up son.

"Your grandpa would be pleasantly surprised to see you now. Last time you visited, you were pestering him to let you ride the big horse. Now you can handle things on your own."

"I'm sure I can ride now. Haha. Alright, I'm off!"

In the original Blake's memories, there was a big horse named Janet on grandpa's farm. Carter was only 13 years old then, and even getting on the horse was a struggle without grandpa's help.

Saying goodbye to Jenny, Carter headed to school. With exams approaching, there wasn't much point in attending classes. Carter went straight to his classroom to start reviewing for the upcoming tests.

Two weeks flew by quickly. Campus life remained as dull as ever, except for occasional visits from Lillith, who always managed to stir things up a bit. But overall, everything was normal.

As for his relationship with Lillith, Carter managed to control his desires that night in Atlanta. They flirted and teased each other, but it didn't go any further. While there was a slight breakthrough in their previous barriers, it was just that.

And why didn't things go further? First, Carter was afraid of getting too involved, and second, he was afraid of contracting HIV.

It was 1979, two years before the first reported case of HIV, and seven to eight years before Ronald Reagan would make a big speech addressing the HIV epidemic. In such a perilous and "happy" environment, people who couldn't control themselves were unlikely to live long.

Outside of school, Carter's main concern was the performance of gold. Thanks to the relatively modest rise in gold prices, and with silver prices drawing attention away, Julian had successfully acquired a considerable number of gold futures contracts.

When Carter calculated the leverage involved in futures trading, he was amazed.

Under normal circumstances, with $3.2 million, he could buy approximately 5992 ounces of gold at $534 per ounce. However, with futures, the story was different.

A single gold futures contract, with a volume of 100 ounces, required only $1000 in margin. Comparing the value of the contract with the current gold market price multiplied by the contract volume, the leverage ratio was less than 2%, about 1.8%. This was more than four times less than the 8% margin required for gold futures trading on the Shanghai Stock Exchange in the future.

After deducting the $1000 margin and the expenses of purchasing the contracts, Julian helped Carter calculate that with an initial investment of $1.8 million, the contract value amounted to over $96.12 million. This translated to a leverage ratio of 53.4 times.

With $1.4 million left, Carter used it to acquire contracts already circulating in the market. Although these contracts were more expensive due to the rising price of gold, their prices were still relatively low compared to the contracts Carter had just established. Most of them were priced between $200 to $300 per ounce. In terms of liquidity, it was much easier to unload these existing contracts than the newly established ones.

However, the new contracts were a different story. If Carter lost control of them, it would be almost impossible to unload them due to their high delivery price. And when the contract execution date arrived, where would Carter find over $96 million? No matter how successful the Magellan Fund and Quantum Fund were, it was impossible to turn several hundred thousand dollars into over $96 million in a year.

As Carter watched the fluctuating federal fund rates, he couldn't help feeling anxious. The constant changes in the rates made him uneasy. When the rates spiked to 10% or 12%, Carter panicked, but then they dropped back down to around 10% again. Although the fluctuations in the fund rates weren't as extreme as those of the discount rates, they were still significant.

This strange market behavior and illogical performance made Carter feel uneasy all the way to Texas. He couldn't shake off the worry from his face, and there was no hint of joy at the thought of seeing his relatives after over three years.

"Carter, is something bothering you? You've been frowning the whole way. I didn't want to say anything earlier, but now that we're about to enter Texas, if Grandpa sees you like this, he'll be really upset. He might even think you don't miss him anymore!"

"No, Jenny, it has nothing to do with Grandpa. Don't worry, I'll control my emotions when we get to Grandpa's house. I don't have any problems right now; I'm just worried and confused about some things."