As the company's operations are getting better and better, the people below are working in their respective departments, following a fixed pattern of doing spot trading or various suites, and the work is gradually becoming boring.
This is not possible, but you can also do some new tricks and tricks, if you want to find some fun for yourself, otherwise work is not boring.
In accordance with the delivery regulations for copper futures in the previous period, warehouse deliveries in Shanghai, Ningbo, and Wuxi regions are not subject to levy. It is said that the Shanghai region has always been the wind direction of domestic copper prices, basically the lowest copper price region, and the surrounding provinces' refineries are based on the above-sea copper price plus certain freight as a benchmark for local pricing, the price is higher than Shanghai.
I remember when I started this line, we were very sad to deliver the order to Wursi. Because there is no sales channel in the Wursi area, the cost of shipping back to Shanghai or Ningbo is high, and the result is not to say higher than the price of Shanghai, even if you want to sell at the same price as Shanghai.
After doing this twice, I thought to myself: If I sell a lot of goods in Ningbo warehouse and deliver them, will the people who receive the goods also sell them at a discount?
So, I started planning. After about two months, I finally felt that the time was ripe, so as the delivery date approached, I did more and did nothing on the contract for that month. By the delivery date, I sold the delivery with the company's stock in the Ningbo futures warehouse, while, when buying the delivery with multiple positions, I submitted the application for the delivery of the preferred Shanghai delivery warehouse.
Two days later, my majority stake was willingly distributed to the Shanghai warehouse for payment. Since the purchase and sale price were the same, it was as if I had exchanged the copper from the Ningbo warehouse for the copper from the Shanghai warehouse, and it looked as if I had exchanged a lot of goods for nothing.
But I knew that my plan was half-successful so far, and that the next step was to wait for the Ningbo warehouse to receive the bulk of the goods.
However, after a day or two, I was assigned to the Ningbo warehouse for a lot of goods, and through a friend's introduction, I went to the door and offered to sell them to me at a discount. Seeing the trap I had dug was trampled on, I was not happy for a moment. So I hurried to sell the Shanghai goods at the market price, and I quickly took my Ningbo goods back.
So, through the delivery of the futures market, and then through the buying and selling of the spot market, the bulk of the goods in the Ningbo warehouse returned to their own hands, still with a small difference in price.
And so, over the next few months, I played this kind of pranks over and over again, and every time I got a bunch of Ningbo merchandise, I couldn't help but feel happy, like I was catching my prey in a trap I dug.
Of course, this is not an easy prank to play on. When my boss came back from Shanghai to pick up a bunch of branded goods that made me sick, I just had to stop.
There are dozens of registered brands of copper in the last period, roughly divided into three categories: hydraulic copper, plain copper and wet copper. Among them, there are only four types of hydraulic copper, with the price of the price of 110 yuan, while plain copper and wet copper are standard prices.
In the spot market, the price difference between different grades of copper often fluctuates, in the past three or four years, precious brass is sometimes more than 300 yuan higher than plain water copper, sometimes only 10-20 yuan higher; wet copper is of poor quality than plain water copper, sometimes more than 150 yuan lower than plain water copper, sometimes only 10-20 yuan lower.
There is such a fluctuating price differential in the spot market, and the futures delivery rules follow a fixed set of upscaling standards, which inevitably becomes a passive-aggressive monkey wrench. Having already played the goods exchange of the two warehouses, it is natural to play the goods exchange of the two brands.
Therefore, when the price difference between hydraulic copper and plain copper is low (for example, 10-20 yuan), in the spot market to collect a lot of hydraulic copper warehouse orders, and then in the contract of the month at the same time buy and sell; when the delivery date, the hydraulic copper will be sold with empty positions, and the purchase of multiple positions, then the upper term proposed priority delivery of plain copper. If all goes well, the previous term will give me a lot of plain copper warehouse orders, and according to the price of 110 yuan of hydraulic copper, the middle price is the profit of the exchange.
Similarly, when the price of wet copper is lower than a larger quantity of plain copper, some wet copper can be registered on a stock order, sold for delivery, and then bought for delivery.
In short, what I am going to do is to constantly look for the lowest price of copper on the spot market, sell it to the futures market, and buy the highest price of copper on the futures market, sell it to the spot market.
This type of leverage occurs several times a year, taking advantage of loopholes in the regional futures delivery system and in the branded leverage settings.
Although not very profitable, it is very effective against the boredom of avoiding work, after all, everyone has a heart for comedy.
In late 2015 and early November 2016, the spot and futures markets for copper entered a nearly year-long slump.
On the one hand, the trade financing model has been hit hard, trade has shrunk dramatically, many small and medium-sized traders have been forced to shut down or transform, and there are fewer participants in the spot market.
On the other hand, the trend of devaluation of the RMB since 2015, which made the original pattern of exchange rate deficit, interest rate deficit on both ends, has become a situation where the exchange rate deficit is mainly based on losses. Financing traders, if they do not lock the currency, encounter the RMB once significantly devalued, or a few months dry, then the loss of one-time collapse, the risk is too high; but if each time to lock the currency, the cost of lock exchange makes the interest rate gains are basically swallowed, resulting in no profit.
In the context of protecting the RMB exchange rate, the banking institutions have also significantly tightened the policy of credit cards, enterprises are opening credit cards more and more difficult, many small and medium-sized commercial enterprises can not open them later. Even if credit cards are opened, the bank's scrutiny of cargo documents, contracts, invoices, etc. is becoming more and more strict, originally a bill of lading or deposit can be turned around dozens or even dozens of rounds in various banks, now two or three times can no longer be used, so the scale of financing trade is also greatly reduced.
At the same time, a series of banknote scandals in the agricultural sector and in several domestic banks led regulators to start scrutinizing the bills, and the scrutiny of the authenticity of the trade context became increasingly strict, coupled with the decreasing financial yield and the huge compression of the margin between the discount rate and the note discount rate, so that the domestic trade discount model using the bills did not work.
Thus, the depreciation of the yuan, the decline in the yield of asset management products, coupled with the increasingly strict banking regulatory scrutiny, have suddenly turned the trade finance model, which was at its peak in the past few years and for which countless companies competed, into a wild card.
It's amazing that many small and medium-sized businesses that are mainly based on trade finance have been shut down or transformed, and that the Shanghai Commerce Building, where houses were hard to find and rentals required waiting for months, now has many empty rooms, elevators and hallways that are not so noisy and crowded.
On the other hand, the copper futures market also suffered its worst slump in over a decade.
In the year since the end of 2015, the black market, supported by supply-side reforms, has seen its prices double or triple; chemical varieties have also risen significantly, driven by the rebound in crude oil.
In the metal sector, the price of aluminum doubled under the influence of the tight supply of minerals. Even the aluminum of the old-fashioned Yokohama, indeed, from over 9000 tons to 15,000 tons.
Basically, the main mines are in the expansion of production, domestic copper smelting capacity is also in the expansion, TC/RC is also high for many years, the supply side only growth will not decrease, the rise in copper prices will feel like a pressure mountain; and look at the demand side, the real estate market explosion and the construction of infrastructure projects in various places, and the black, chemical and other varieties of the sky, so that copper does not fall.
Thus, the formerly booming long-term contracts in copper, regardless of the current structure, have turned into black, chemical and even rubber, aluminum and other varieties of speculative capital; the original financial atmosphere is rough, and the financing traders who do not care about the spot price hike or the difference in the price of the cross-period have also disappeared.
Copper, as if forgotten by the market, has seen a sharp decline in spot trade, and the stock of copper and brass has also fallen to its lowest level in more than a decade, leaving the spot market on the brink of collapse.
The traders who continue to adhere to this market, operating ideas and strategies as if they came up with something, thinking about it, thinking about it, just can't find a trading partner, how to play!
In June and September 2016, the atmosphere reached its peak: the cash-on-delivery system could run all day, and there was no fluctuation of twenty or thirty yuan for a week or two; the price of copper futures fluctuated only a few hundred points during the night, and then the next day, the entire morning time fluctuated in the range of one to two hundred points, some businessmen bought and sold goods in the morning, and looked back at the price was the same, and was questioned by the finance department whether it was in transit.
The monthly price difference in copper has also lost the kind of big-mouthed luxury of the previous two years, like a small-footed old woman who generally moves quietly to small pieces, at the most extreme, the price of several months of contracts is the same, like a stitch.
In such a market environment, the previously simple long-term leverage model is becoming increasingly difficult to operate, and only a few new models can be created:
This is the combination of the right and the wrong, and even if one direction is wrong, the other will be profitable and the risk will be greatly reduced.
For example, on Friday, November 13, 2015, the prices of the copper 1511, 1512 and 1601 contracts were 36120, 36270 and 36200, respectively, forming a structure of medium high and two lows. After analyzing, we made a positive interest rate of buy 1511 empty 1512 and a reverse interest rate of buy 1512 empty 1601, which is equivalent to the conversion of the price differential structure into medium low and two lows.
Since the 1511 contract entered the delivery process on the second day of trading, we are equivalent to 150 yuan of liquidity to copper, and then sold on the spot market at 60 yuan of liquidity; meanwhile, in the later rebound of the copper price, the 1512-1601 contract is at a price differential of 30 and a profit of about 100 yuan.
At the end of April 2016, the 1605, 1606 and 1607 contracts formed a narrow positive alignment, with monthly price differentials of 80 and 90 points respectively. After analysis, we made a positive bid of 1605, a negative bid of 1607 and a negative bid of 1605, a negative bid of 1606, and formed a seemingly contradictory position that the prices of 1605 and 1607 will decrease, while the prices of 1605 and 1606 will expand.
In this position layout, if the contracts are moving in a wide direction, the gain on the empty 1605 and buy 1606 positions will be greater than the loss on the empty 1605 and buy 1607 positions; conversely, the gain on the empty 1605 and buy 1607 positions will be greater than the loss on the empty 1605 and buy 1606 positions. Of course, I expect both positions to be profitable.
Anyway, in early May, we quickly had the opportunity to tie 1605 and 1607 contracts at 80 points, with a profit of 90 points. Then, I went to the Hubei Yellowstone Mining Copper Industry Chain Conference, opened the mobile phone software at the venue to see the situation, and the price difference between the 1605 and 1606 contracts expanded to more than 150, rushed to the meeting place and called, the result was that all the contracts were just tied at 200 points.
This combination of cross-term interest rates, although the profitability is far from the previous two years, but one, this is achieved in the context of the copper monthly price is very aggressive, dense and difficult to follow the hands, it is difficult to be expensive; secondly, in the past it was simply to do the front or reverse of the front, even if at the same time operate multiple combinations of approximate interest rates, the direction is generally the same, but the combination of cross-term interest rates are both front and back on the same month contract, the analysis of decision-making also from the point of view of the simplistic structural way, is considered an innovation.
With the outbreak of the double eleventh week of the end of 2016, the copper market has finally revived, and the monthly price gap has gradually returned to its previous status, believing that there will be another round of cross-term leverage opportunities in the future.
Translated by Poker Investors