Chapter 61 Establishing a Position
The London Real Estate Dealers Association is located in the City of London. It is a not tall building, but the foyer looks very simple and elegant. There are 8 doors down from the third floor. Behind this stone pillar is the gate of this trade association.
In London, most of the guilds with a bit of history will set up their headquarters in the City of London. It is very likely that there are old buildings that look a little shabby and inconspicuous. Trade associations that control hundreds of millions or even billions of pounds in assets.
The reason why I am here today is that Viscount Bute is going to introduce Barron to the Real Estate Dealers Guild. As a member of the London Real Estate Dealers Guild, the Bute family directly introduces Barron to the London Real Estate Dealers Guild every five years. If a member is qualified to join, as long as their proposal is not voted against by more than half of the members of the trade association, then the other party will directly become a member of the real estate developers trade association.
It can be said that since the establishment of this trade association, there has never been a situation where membership was rejected after being introduced by the committee members. After all, as a member of the real estate developers trade association, I will not risk the world's disapproval and do something too outrageous. recommended.
"Lord Bute, you did a good job in King's Cross."
While Barron was following Viscount Bute and his wife in the hall to get acquainted with other members of the guilds, a burly middle-aged man The young man came over with a smile on his face and said to Ian Butt.
Seeing the other party, Viscount Bute put on a somewhat respectful expression on his face:
"His Royal Highness the Duke of Grosvenor, it is an honor for you to praise us, but we A small fight is nothing in front of you."
"Haha, you have done a good job. King's Cross is the most important urban renewal in England in the next twenty years. It is very important. Prospect.”
Hearing the title Viscount Bute, Barron realized that the middle-aged man standing in front of him with a hearty smile was the largest landowner in London. It is said that a quarter of London belongs to his family, and there are countless others around the world. Estate of the Duke of Westminster – Gerald Grosvenor.
Just when Barron looked at the Duke of Westminster, the other person’s eyes happened to fall on Barron:
“What a handsome young man, this is Duke of Devonshire."
"Hello, Mr. Grosvenor, I am Barron Cavendish."
Facing the hand that the other party extended, Barron shook hands with him and said.
"Barron, I have dealt with your father several times, and I am very sad about his unfortunate death, but you have done well recently."
......
In fact, coming here today, Barron is just making more connections, and there will be no substantial cooperation.
After all, he inherited the family business in a hurry. Unlike other aristocratic heirs who were trained from a young age, what he lacks now is connections, and he needs to make up for this slowly.
During this period, he took time to participate in many activities, including charity dinners and gatherings of certain nobles, for this purpose.
After this gathering, Barron was also registered in the London Real Estate Dealers Guild. At the guild meeting held at the end of the year, if the Bute family's recommendation is not opposed by more than half of the members, Barron will officially become a member of the London Real Estate Dealers Guild. A member of the Real Estate Dealers Association.
As a director of Argent Real Estate Group, Barron is also qualified to join - because he holds a total of 20% of the group's shares, Barron has two seats on the board of directors, one representing DS Capital Barron himself, and Julia Moore on behalf of the family trust.
"Your Highness, Miss Daisy just called you and asked you to call her back when you have time."
Hearing what his assistant Wang Yating said to him, Barron took the call. He had asked the other party to keep observing the price of copper in London before, so Barron walked to a slightly secluded area and dialed Daisy's number.
“BOSS, the price of London copper has exceeded 1,480 pounds today. Can we start building a position?”
"Very good, Daisy, first establish a position of 2,000 lots, observe it, I will go there later."
London copper futures, each lot is 25 tons, so if the price is 1,480 pounds per ton , the value of one hand is 37,000 pounds. However, DS Capital cooperates with Barclays Bank and can use 5% margin for short selling, which is equivalent to 20 times leverage. Barron knows that the highest price of London copper in this round is around 1,500 pounds, so starting from 1,480 pounds Establish a position and then gradually increase the leverage. This price is still very safe, and there is basically no risk of liquidation.
If it is like their 5% margin, then selling one hand of London copper at the price of 1480 will only require a margin of 1850 pounds.
They currently have 33 million pounds of funds, which is enough to borrow about 17,800 lots of London copper for sale!
Of course, when it comes to actual operations, it is definitely not possible for such a naive person to directly borrow all the positions to go short. Instead, he first establishes a certain position, and then gradually builds a position according to the subsequent price trend. In this way, in the early stage, You can have enough margin to avoid being forced to liquidate due to insufficient margin in the case of a black swan.
Speaking of which, whether it is futures or stocks, banks’ margin trading business is basically risk-free to earn handling fees, because usually they will not really wait for you to run out of margin. When the liquidation situation is approaching, the customer will be notified in advance to increase the margin. If the margin cannot be increased in time, the other party will decisively force the liquidation to avoid the loss of their own funds. .
Investments with extremely high circulation, such as London copper, gold, and foreign exchange, are better. If it is a stock with a small circulation, closing a large position in an instant will still have a great impact on the price. Yes, banks always need to consider this.
To put it bluntly, even if there is a loss in the end, it will only lose the customer's deposit. Their own funds need to be absolutely safe.
In late July, it was almost time for London Copper to start falling, so Barron instructed Daisy to pay attention to the price of London Copper. Once it approached 1,500 pounds and reached above 1,480 pounds, she could start to build a position. At this price, even with a very low margin, safety can be ensured.
After attending this meeting of the London Real Estate Dealers Association, Barron said goodbye to Viscount Bute and his wife, and drove directly to the Financial City, the securities investment department of DS Capital.
When he arrived, Daisy moved quickly and had completed the short sale of 2,000 lots of London copper.
“The average selling price of these 2,000 lots was around 1,485 pounds. After we established the position, the price of London copper has been fluctuating between 1,485-1,490, and it seems that it has completely taken over our position. Order quantity, do you need to continue?”
Listening to Daisy’s words, Barron sat in front of the computer and observed the trend of London copper.
Since July, the London copper rally that started in the first half of the year has begun to slow down.
To say it is slowing down is just to say that compared with the previous wave of rapid rise, its price is still rising slowly, and being able to accept their position orders shows that the current buying order is relatively strong, but it is not Do you want to continue the test?
No matter what, they need to complete the position before the price reaches 1,500 pounds - he does not doubt that with the addition of his own selling orders, the price of London copper can still reach 1,500 pounds.
After all, the London copper market is not at the same level as the Nasdaq stocks he bought before. These orders of his have minimal impact in such a market.
“Continue to add positions and strive to sell more than 5,000 lots today.”
“Okay, BOSS.”
The data during the new book period is related to subsequent recommendations, so follow-up reading is very important. I beg you not to keep it all the time. If you feel that it is okay, read it every day to help increase follow-up reading. Thank you very much.
(End of this chapter)