Chapter 430: Prosperity of military fortune!
After the Plaza Accord was signed, the first money that Shirakawa Feng wanted to make was from foreign exchange trading.
At the same time, this is also the biggest deal that Shirakawa Kaede has made in the financial market so far.
Opportunities are rare, and he would be doing a disservice to his status as a successor if he didn't reap the benefits of this historic moment.
The so-called foreign exchange trading is also called foreign exchange margin trading.
It means signing a contract with an investment bank, opening a trust investment account, and depositing a sum of money (margin) as a guarantee.
The bank or brokerage investment bank then sets a credit limit and conducts large foreign exchange transactions with very little margin, which is the leverage effect.
In this way, investors can freely buy and sell spot foreign exchange of equal value within the quota, and the gains and losses caused by the operation will be automatically deducted or deposited from the above investment account.
This is the general process of foreign exchange speculation. To put it bluntly, it is also a kind of speculative behavior.
In the past few years, the London market has already developed leverage gameplay.
In the following years, this method of leveraging large transactions with very little capital quickly became popular in the global market.
Up to now, leverage operations are generally carried out in the foreign exchange market, and the minimum leverage ratio is between 20 and 50 times, and over 100 times is very common.
If the margin financing ratio is 100 times, the minimum margin requirement is 1%.
Then, investors only need $1,000 to trade up to $100,000, which fully utilizes the leverage effect of making a small investment for a big gain.
In addition to capital magnification, another most attractive feature of foreign exchange margin investment is that it can be operated in both directions.
Investors can buy to make a profit when the currency rises (going long), or sell to make a profit when the currency falls (going short).
Such repeated jumps can free funds from the restriction of not being able to make money in the so-called bear market, thus providing greater profit space and opportunities.
So how does leveraged trading make money? Here’s an example.
For example, if the Japanese yen appreciates against the US dollar, and I add a 100-fold leverage, then I will actually invest a deposit of 100,000 US dollars (100×1%), and I can buy Japanese yen with a contract value of 10 million US dollars.
When the exchange rate of the Japanese yen against the US dollar rises by 1%, the investor can make a profit of 100,000 US dollars, and the actual rate of return reaches 100%, which means that the principal is doubled.
But if the yen falls by 1%, investors will lose all their money.
So it doesn't mean that if you add 100 times leverage, the final profit will be 100 times the principal. That would be too incredible.
However, with a leverage of 100, every 1% increase means a 100% profit, which is already a lot.
Look at the return rate of the manufacturing industry. The profit margin of high-tech, high value-added products can be 30% to 40%, which is already very good.
Shirakawa Electric's profit margin is roughly within this range. If it is raw materials or textile industry, etc., the profit margin can be 10% to 15%, which means the economy is booming.
So playing with finance does make money quickly, and the payback period is very short, and sometimes you can even achieve this goal overnight.
Of course, the foreign exchange market makes money quickly, but also loses money quickly.
With 100 times leverage, when the market goes down, you don’t have to lose all your capital. As long as the loss exceeds a certain amount, the dealer has the right to stop the loss mechanism.
After all, you are using $100,000 to leverage my $10 million. It is right to set a bottom line and stop losses in time.
Late at night on September 22, Shirakawa Kaede, Arai Hiroshi, Oda and others as well as Kitato Bank's own traders gathered at Kitato Bank's current headquarters in Chuo District.
"We have drawn up spot contracts with all the major banks in advance. As long as the authorities come in, we will follow!"
Baichuan Feng didn't know what time the five central banks would start taking action on the 23rd, so he could only keep a close eye on the market. As long as the US dollar fell significantly, Baichuan Holdings would follow.
After all, it's $8 billion in funding, so we have to be cautious.
At this time, not only Baichuan Feng's palms were sweating, but everyone else here looked nervous.
With just a few clicks, hundreds of millions of dollars can be circulated. How can you not be nervous?
After wandering around the room for a few rounds, Shirakawa Feng stopped, put his hands on his hips and looked at Arai Yu.
"Arai-san, how much do you think the yen will appreciate in value in the end?"
"Eh" Arai Yu, who was struggling with himself, didn't expect Shirakawa Feng to suddenly talk to him about this topic.
"Probably around 10%." After a little thought, he gave his answer.
There is basically a consensus that the Japanese yen will appreciate.
However, because the Plaza Accord did not specify specific numbers, no one knows how much the five countries are prepared to let the yen appreciate, or how much the dollar depreciate.
However, the exchange rate issue is related to the national economy after all, so people in the financial field such as Arai Yutaka privately speculate that the yen will eventually appreciate by about 10%.
This is already a lot. Obviously, this increase will affect both imports and exports.
Given Japan's foreign trade volume, a 10% appreciation of the yen would likely result in losses of tens of billions of dollars.
Arai Yu doesn't believe that the government will not take this into consideration, so his estimate is conservative.
Shirakawa Kaede was noncommittal about his answer. "So, Arai-san, how long do you think it will take for the yen to appreciate by 10%?"
“According to the previously announced agreement, it should be within a year.
But considering that central banks will sell dollars, this time may be shortened to one month."
Yuya Arai knew what was going to happen to the central banks of various countries, and this was even something the Japanese government intentionally revealed to the country's large banks.
The purpose is to form a united front. Our central bank is ready to take action, why don’t you follow suit?
Don’t even think about getting rich when the time comes because I won’t be taking you with me.
Needless to say, the major chaebol banks that received the news have already made secret preparations.
It is for this reason that Hiroyuki Arai predicts that the yen will appreciate by 10% in as little as one month.
Baichuan Feng's eyes flashed, "Arai-san, what if I tell you that the yen will appreciate by 10% within a week and reach 15% within two weeks?"
"Impossible!" Arai Yu stood up in shock, "If the exchange rate appreciates or depreciates too quickly, it will cause the market to blindly follow suit.
Once the market loses its rationality, it will definitely have a catastrophic impact on the country whose exchange rate is being copied.
By then, not to mention the European and American governments, Japan will also..."
Suddenly, Yu Arai was stuck and stood there in a daze. If the Japanese yen appreciates too quickly, wouldn't Japan be the one to be hit the hardest?
He turned his head and looked at Baichuan Feng. There was an inexplicable meaning in the latter's eyes, but at the same time he was terrifyingly calm.
Baichuan Feng did not explain whether the news was true or false, as if it was just a hypothesis.
But for some reason, Arai Yu suddenly became extremely certain that the yen would appreciate to 10% much faster than expected.
“We use 100 times leverage and enter the market in batches. If everything goes well, we will withdraw part of the funds within a week and all of them within two weeks.”
Baichuan Feng doesn't care about the specific operations, but in the general direction, a bottom line must be set.
"I understand." After hearing this order, Arai Yu became more certain that the appreciation of the yen would become apparent within two weeks.
The next period of time was a long wait. However, until two or three in the morning, the US dollar remained high in the foreign exchange market, with no sign of falling.
There is no point in just waiting. Who knows when the five countries will take action? What if it is in the afternoon or at night on the 23rd?
In the silent trading room, Baichuan Feng stood up and stretched.
"Mr. Arai, I don't understand K-line or positions. But please understand that the yen will only rise in the next two weeks, not fall!"
Baichuan Feng couldn't give him more specific information, but this was enough. In a market that would only fall in the next two weeks, he could make money with his eyes closed.
This is equivalent to setting the prerequisite that the Japanese yen will not depreciate, and there will not even be any fluctuations.
Knowing this information would be like cheating for financial practitioners.
The reason why Baichuan Feng emphasized this point to him was to allow him to maintain his mentality and buy the yen with confidence.
Hearing his solemn assurance, although Arai Yu was a little hesitant, he still nodded to show that he understood.
Maybe Baichuan-san got some news, otherwise how could he be so sure.
But since we have inside information, why not add a little more leverage?
The current international foreign exchange market is not like the 400-fold limit in China in later generations. Not to mention 100 times, even a thousand times is no problem.
As for why he didn't add it, it was because Baichuan Feng was afraid that due to some inexplicable reasons, if history took a slight turn, he would suffer a huge loss.
The greater the leverage ratio, the higher the risk of liquidation.
So even if you know what is going to happen, it is better not to be too wasteful.
Moreover, large transaction volumes entering the foreign exchange market are likely to attract the attention of all parties.
As I said, make a fortune in silence.
After explaining everything here, Baichuan Feng also stood up and left the headquarters of Kitato Bank.
Let them take care of the rest, and he was going to catch up on some sleep first.
He didn't plan to go back to the house in Sumida Valley as it would wake up the children in the middle of the night.
After thinking it over, he decided to go to Xiao Huya.
Only she can feel a little quiet and let herself do whatever she wants.
After returning to the port area, Baichuan Feng did not disturb the sleeping Xiaohuya and crawled into bed to catch up on his sleep.
In a daze, he dreamed that he was standing on a mountain, looking down on the world and all living beings.
This mountain is a mountain made up of US dollars.
The people below had adoration in their eyes as countless beauties surrounded him.
They hugged me, kissed me passionately, and hugged me tighter and tighter... until I couldn't breathe.
"Huh~" Baichuan Feng, feeling unbearable chest tightness, opened his eyes drowsily.
I saw that Little Tiger Tooth was wrapped tightly around me like an octopus, with its entire body lying on my chest.
With a wry smile, Baichuan Feng had to slowly push her away.
It's a pity that my beautiful dream ended so early before it could be fulfilled.
"Ding-ling-ling~" The crisp ringing sound of the telephone sounded extremely harsh in the silent bedroom.
Baichuan Feng, who had already woken up, simply sat up and picked up the phone.
"Moshimoshi?"
"I finally found you, Mr. Shirakawa. We and Nomura Securities are ready to enter the market. Will Kitato Bank follow suit?"
"Of course!" Baichuan Feng, who was half asleep and half awake, suddenly felt like he was given an injection of chicken blood.
"Good! Five minutes later, the Japanese yen will rise, and the US dollar will fall!"
"May your military fortunes prosper!" Baichuan Feng didn't waste any words and just swung his fist fiercely.
"May your military fortune flourish!"
Click, Bai Chuanfeng hung up the phone and glanced at the alarm clock on the bedside table. 7:55~!
Without hesitation, he quickly dialed another number.
"Arai-san, eight o'clock! The yen is rising! The dollar is falling!"
"clear!"
The clarion call for attack has been sounded, and the is here!
The dawn outside the window breaks out from the dim gray-blue sky in the east, and the golden morning light is dazzling and charming.
