The Rebirth of the Male God Starts From Playing Games

  Chapter 129 127. Just a lunatic! (Shelf, please subscribe)

  When you have insured securities, then buying CDS is just a hedge fund.

  But if you did not purchase securities in advance, but bought CDS directly, then you are shorting.

Because you don’t have securities in your hand, you don’t have any securities income to offset the premiums (the money paid to the CDS issuer on a regular basis). Once there is a problem with the securities, you can ask the seller for the same value of the security itself, which will earn you money. Arrived, if everything is normal for the securities. Then you have to pay the seller for nothing.

  ...

  There are many ways to go short, which are essentially buying and selling.

  However, the traditional short-selling method is to first borrow the underlying asset, sell it for cash when the stock price is high, and then, after a period of time, wait for the stock market to fall, then use cash to buy the stock and return it.

  The premise is that you have to predict that the stock will fall before you can sell a lot, and use the price difference to get the corresponding profit.

   Generally speaking, it is still selling high and buying low, but it is just the opposite of ordinary shareholding methods.

  Traditional short selling methods have limited yields.

  For example, if you short a stock, assuming that the stock falls as expected, and the worst can be cut in half, then your short-selling profit is 50% of the time you sold it.

  So when shorting, leverage is generally added to make greater profit margins, and it is possible to increase it to ten times or twenty times.

   But in this way, the risk factor will increase. Maybe this stock rises by a few tenths, and you will lose your money.

There is a difference between    and short selling with CDS.

  For example, CDS in the aviation industry is an insurance against default risks of corporate bonds in the aviation industry.

  When the market is good, such companies have a low risk of default and insurance is very cheap, perhaps only 30 basis points. After the spread of the epidemic, the aviation industry was hit hard. The risk of defaulting on bonds in the aviation industry rose to 30%, and the corresponding insurance price rose to 3,000 basis points. If you previously bought CDS and sold it at this time, you would get 100 times the income.

   During the 2008 financial crisis, the big short Michael Burry also used similar derivatives to make a profit.

  In 2020, Bill Ekman took advantage of the outbreak of the epidemic to win 2.6 billion at a cost of 27 million, which was short-selling by relying on CDS.

  The general short selling method certainly does not have such a high rate of return.

  Cao Yang aimed at this point, so he chose CDS.

  Because the investment is small, even if it is checked in the future, the risk can be reduced.

   But once the profit is made, it may exceed dozens of times, hundreds of times.

Because the CDS spread in the aviation industry is very narrow, there is not much profit even if it is bought. Of course, the probability of loss is relatively low. Unless there is really a large-scale decline in the aviation industry in the future, Cao Yang’s investment is equivalent to giving it for nothing. Others pay insurance fees.

"alright."

  Xu Hao really feels that Cao Yang burned with too much money. Unless he is confident that the airline’s stock will fall, buying CDS and shorting it is equivalent to spending money in vain.

  It's only $10 million, which is nothing.

   is really nothing. Compared with the conventional operations conducted by Goldman Sachs, the $10 million transaction is not even a fraction.

  This is the downside of being a stockbroker. After doing it for a long time, there will be no turmoil in the heart of seeing less than eight figures.

  Similar to a bank employee, obviously with a salary of 2,000 yuan a month, I still feel that a few million is not a big deal.

  Hey, it has expanded.

  Xu Hao sighed silently in his heart.

   "What's left? Do I need my help to buy other stocks?"

   "The rest, you can buy whatever you want." Cao Yang said, "Whether it is shorting or buying stocks, you can just spend 100 million US dollars."

  Xu Hao:? ? ? !

  WTF?

  What kind of demand is this?

  So far, Xu Hao has never encountered a customer like Cao Yang.

  Others are cautious, for fear of wrong operation.

  This boss is good, he said that this one hundred million is not his own.

  Be aware that this is 100 million U.S. dollars! !

However, based on the professional qualities of a broker, Xu Hao still asked patiently, "So, I suggest you buy some Nasnaq stocks. Many high-tech, especially the Internet industry, have almost fallen to the bottom now. I can buy some for you, and it should go up in the future."

  Xu Hao uses his own expertise to make judgments.

  In fact, although the Internet bubble in the United States burst, causing the overall stock market to frustrate, the entire Nasdaq is falling, but as a high-tech industry, Xu Hao believes that these companies can still improve in the future and return to a normal valuation level.

  After the bubble burst in 2000, the US stock market is picking up. It is expected that the lost ground will be recovered in a few years, and the Nasdaq will be able to return to the original 4000-point mark.

  In this way, the future appreciation space of the Internet industry is still quite large.

  According to the words of the stock **** Buffett, investing in a company mainly depends on its own value. All stock price fluctuations ultimately fluctuate on the basis of this inherent value.

  You should not be optimistic about the company you were optimistic about because of one or two economic crises.

  What to do or what.

  Finally, the market will return to its true value.

  Therefore, the stock price of the Internet will rebound in the future, which is basically the common understanding of all stock traders.

  "Apple is now $7.30, and Amazon...I can help you with these."

"Wait a moment."

  Cao Yang stopped him immediately.

   "Huh?" Xu Hao stopped the keyboard in his hand and waited for Cao Yang, "Is there any problem?"

  "You can buy it for me." Cao Yang said, "You just said all these, you just short for me, and then you can do whatever else you want."

"Uh…"

  Xu Hao supported his forehead with his hand in pain.

  Is this man stupid?

  Such a good opportunity, you still want to be short if you don’t buy it? !

   Crazy crazy.

  Xu Hao’s first instinct is—

  Cao Yang is crazy.

  This Nima, Apple has already fallen to $7, can it fall further? !

  Nasdaq has been cut in half since the bubble burst last time, from more than 4,000 points to only 1,600 points. How can there be room for decline? !

  Selling at this time, isn't it just taking money for fun? !

  No, I think it’s too much money, so I burn it for fun.

  So, isn’t it good for you to do charity directly? !

   can also help the poor.

   Before Xu Hao could speak, he heard Cao Yang’s voice again over the phone: “By the way, the airline, you can help me make more money, preferably tens of millions of dollars.”

  Cao Yang continued, “In the case of high-tech industries, most of them are short-selling, and a small part is bought. You can buy oil and natural gas for me, and you can just spend 100 million on other things.”

  Instead of shorting airlines, they did a lot of other companies, so that when they were scattered and checked, they would not find themselves.

  According to Cao Yang’s idea, apart from that than cds, everything else is not very important. The more random the better, the less likely it is to be seen by others.

  Otherwise, there will always be a suspicion that he would know beforehand that 9/11 will happen.

  When the time comes, will he not be labeled as a terrorist? !

  "..."

  Xu Hao felt very speechless.

  This is too messy, right?

  Xu Hao swallowed.

  The image of Boss Cao in his mind is completely a gambler who has lost his mind.

  No, not even a gambler.

  I'm just a lunatic!

  ...

  (End of this chapter)