Chapter 842: Pulling Sumitomo Corporation into the game

"Wang Qi, start exerting your influence now. Push up the prices of copper and aluminium futures on the Tokyo Futures Exchange, and at the same time, get Furuhara Kazuya to step in and approach Sumitomo Corporation...'

After the call with Wang Qi ended, Xia Yu took the receiver and tried to call George Berkeley in London again, but after a moment's thought, he decided to wait.

The London Metal Exchange is the world's largest metal futures trading market, and the waters within are even murkier than those in New York and Chicago. If you jump in recklessly, you will easily attract the attention of the giants, and the risks will be uncontrollable. The best approach is instead to quietly raise the price. After all, he had already instructed George Berkeley before, and the latter knows what to do.

Besides, as long as Kazuya Fukuhara did his part and convinced Sumitomo to join their side, the LME would have a leader.

It was better to let the devils do the work of attracting hatred. With the arrogance of the devils of this era, they had no qualms about showing the devils of Europe and America their power.

And in Xia Yu's opinion, if you really wanted to change the world, it wasn't in the exchange, but rather off the exchange!

Here, it was impossible not to mention the speculative methods of futures.

The most well-known speculative methods are 'hoarding' and 'short selling'.

Hoarding means hoarding a large quantity of spot goods while buying futures contracts at the same time, so that the short sellers in the futures market cannot find enough spot goods for delivery and have to admit defeat and suffer huge losses.

The so-called short selling attack means selling a large number of futures contracts with huge financial resources, causing the futures price to continue to fall, so that the futures long cannot bear the losses and is forced to admit defeat and leave the market. Nowadays, Philip Brothers and Salomon Brothers are using this method to attempt to use capital to crush the long positions led by the Galaxy Fund.

'Hoarding' is used to attack short positions, while "short selling" is used to attack long positions.

Both tactics seek to create huge price fluctuations in the short term, causing the futures price of a commodity to deviate significantly from its intrinsic value, in order to make huge profits.

But as the saying goes, in the capital market, the most powerful weapon is always money. With enough capital, you can turn even the most remote mountain valley into a raging torrent in no time, drowning your opponents.

Xia Yu currently relied on capital to withstand the 'short selling attack' of the Phillip Brothers, and was even able to place multiple buy orders to counterattack, forcing Albert Raphael to feel a little unsure in his heart and having to bring Solomon Brothers along, in an attempt to defeat the long positions led by the Milky Way Fund.

If Xia Yu intends to sit tight, the best way is to use large capital to hoard the spot goods, while stabilising the high price of futures, so that the short sellers realise that victory is hopeless and surrender.

Otherwise, just playing with numbers on the exchange, as long as the margin is sufficient, it can be played indefinitely, until the delivery time agreed in the contract.

If Xia Yu did not have the physical goods in hand, the longer the time dragged on, the more money Galaxy Fund would have to invest. The bigger the cake, the more tempting it would be. If Philip Brothers and Salomon Brothers were able to get more companies to join them in hunting him, the risk would be too great!

Xia Yu was not arrogant enough to underestimate the Wall Street crocodiles.

Having the physical goods in hand was completely different. It gave him the confidence to fight to the end and the right to turn the tables.

In particular, I don't know if it was because the Philip Brothers and Solomon Brothers were overconfident in their own capital, or because they were also worried about the uncertainty of a prolonged dispute, the time limit for contract performance was set at three months from beginning to end!

The Galaxy Fund didn't care when the delivery took place, as long as there was a contract to sell, they would take over and buy it regardless. Anyway, as long as the delivery time arrived, if the short position could not deliver the physical goods or close the position with an equivalent contract, they would wait to be forcibly closed out by the exchange.

This involves the trading rules of the futures market, which are actually quite simple.

Let's do a simulated short futures trade using soybean meal as an example. The process of this trade is as follows: if the seller first agrees to a contract, the agreed price in this contract is 3,800 yuan/ton, and the contract has a time limit for performance, for example, three months.

If the price of soybean meal falls to 3,500 yuan/tonne during the three months, and you are the seller in the contract, and it is agreed in the contract that you can fulfil the contract at any time during the three months at the price of 3,800 yuan/tonne, then you can buy soybean meal or a contract on the market at 3,500 yuan/tonne and sell it to the buyer in the contract, thus completing a short selling transaction.

The difference of 300 yuan/tonne is the profit from short selling.

Of course, if the lowest price of soybean meal in these three months is 4,200 yuan/tonne, then it means that short selling has failed. If you are lucky enough to catch the lowest price of 4,200 yuan/tonne and buy physical soybean meal for delivery, you will still lose 400 yuan/tonne, and if you are unlucky, you will lose even more.

Generally speaking, when trading futures, it is all about having the right foresight.

Of course, in theory, as long as there is enough capital, any major momentum can be forcibly reversed.

Thinking about this, Xia Yu called the office of the chairman of the board of directors of Xiangjiang again. The person who answered was Fok Kin Ning. Xia Yu asked him to notify the relevant companies to select personnel to prepare for departure, and at the same time urge the economic research office of Jiuding Newspaper Company, and the Jiuding Business Research Institute, one of the three major think tanks, to compile research reports on the global copper and aluminum industries as soon as possible.

Once the order was given, the Jiuding consortium began to accelerate.

In the following days, with the addition of Solomon Brothers, the battle became increasingly fierce, attracting a large number of onlookers, including financial predators, economic media, and the general public.

More and more information about Galaxy Fund was dug up. Fortunately, Galaxy Fund was registered offshore, and the legal person who pushed it to the forefront was Liu Feng, who was far away in Xiangjiang. On the surface, it had nothing to do with Xia Yu, and Xia Yu was not exposed by the media and in the public eye.

However, in the face of the malicious attacks of some arrogant nationalist media, Xia Yu did not lose his temper and endured. He ordered Yan Wenhan to direct his media to join in, stirring up the waters and making the verbal battles between the media even more intense.

Two days later, Xia Yu received some bad news from George Berkeley in London.

George Berkeley claimed that Bahrain Bank was shorting copper and aluminium futures on the London Metal Exchange, and was quite determined about it. According to the reports of his subordinates, they saw the senior management of Bahrain Bank's futures department entering the London branch of Phillip Brothers, and the senior management of Bahrain Bank's futures department left after spending almost the whole morning there.

Bahrain Bank's involvement was completely unexpected by Xia Yu, but now that it had happened, the only thing he could do was to respond actively.

After instructing George Berkeley to arrange for a middleman to take over, Xia Yu avoided making a series of unnecessary phone calls.

...

At the Celux Club in the island nation of Tokyo, Kazuyoshi Fukuhara and a middle-aged man in his forties soaked in a steaming hot spring pool. There was a small table by the pool, with many snacks and drinks on it. On each side, there were three beautiful women massaging their shoulders and backs, pouring wine and feeding them snacks.

'Fukuhara-kun, thank you for your warm hospitality. I wonder what you want to tell me today?'

Keigo Sumitomo, in his forties, with a crew cut and a luxuriant chest of hair, was enjoying a gentle and soothing massage, and smiled as he looked at Kazuya Fukuhara and asked.