Rebirth 76: Industrial Internet Empire

"Ah? Mr. Gorman, didn't Morgan Stanley do reverse hedging in the Nasdaq futures market? You are completely invincible?" Yang Mo said pretending to be surprised.

James Gorman smiled bitterly and said: "This is an operational error on our part. Morgan Stanley is willing to admit defeat! For the sake of long-term strategic partners of both parties, can we settle the Nasdaq price difference in advance at a relatively reasonable price?" The contract is empty?”

This is the usual way of thinking of Westerners. If they have the upper hand, they will talk to you about the spirit of contract. If they are in danger of liquidating their positions, they will talk to you about partners and worldly relations...

After Yang Mo pondered for a moment, he nodded calmly and said, "It's easy to talk! Mr. Gorman, how do you want to settle in advance?"

Gorman saw the opportunity and hurriedly said: "Morgan Stanley has always regarded Zhiyuan Group as its most important partner, so even if the Nasdaq index plummeted in a short period of time, it did not take action to protect the market. We hope to use Nasdaq as its most important partner." I did some calculations on the half-year average price of the Stark Index and settled the CFD in advance. In this way, Zhiyuan Group can easily obtain at least US$30 billion..."

Yang Mo looked at Gorman dumbfounded, could he still have some shame?

Gorman, however, continued without changing his expression or heartbeat: "In return, Morgan Stanley is willing to waive the commission for Zhiyuan Group's Nasdaq CFD contract..."

Yang Mo chuckled and said: "Mr. Gorman, you don't know something. Zhiyuan Group sold short orders on the Nasdaq CFD, but it was not actually for profit!"

"It's not for profit?" Gorman almost cursed. The book profit exceeds 10 billion. Why the hell are you telling me that it's not for profit?

Yang Mo nodded and said with a wry smile: "Actually, you also know that Zhiyuan Group is the largest bull on Nasdaq and the biggest victim of the Internet bubble. In one year, Zhiyuan's market value has evaporated by nearly 2000 billion US dollars. We Selling short Nasdaq CFDs is also a last resort as a reverse hedging. Otherwise, if the tech stocks continue to fall, Zhiyuan Group will also fall into a liquidity crisis, and our pledged equity in the bank will face great risks. …”

"Reverse hedging?" Gorman looked at Yang Mo in disbelief. Could it be that Zhiyuan Group, which has always been a powerful player in the capital market, will also fall into a liquidity crisis due to the bursting of the Internet bubble?

Yang Mo sighed and said: "Does it sound incredible? But it is indeed true! Zhiyuan Group has expanded too fast in recent years, causing cash flow to dry up. This is why it chose to reduce its stake in Cisco during its peak period! "

"So whether you are shorting in the Nasdaq futures market or shorting contracts for difference, you are doing it to hedge the losses caused by the Nasdaq's plunge?" Gorman asked.

"Yes, of course we hope that the Nasdaq will return to 5000 points, so that Cisco's valuation will return to 6000 billion US dollars, Amazon may even hope to hit 1500 billion US dollars, Yahoo's market value will return to billion, and Andy Investment will once again become the top investment company on Wall Street. ... Alas, there is not enough funds to boost the stock price, so we can only go short in the opposite direction to make up for some losses from the plummeting stock price. To use our Eastern proverb, it means throwing away the watermelon and picking up a sesame seed..." Yang Mo said in a dejected tone.

James Gorman thought for a while and then asked: "Did you agree to the early settlement of the Nasdaq CFD?"

Yang Mo shook his head and smiled bitterly: "Mr. Gorman, it's not that I don't give you face, but that each of our short hedging orders has been accurately calculated. Only in this way can we minimize our investment losses and be safe." Survive this dot-com bust crisis!”

"Mr. Yang, if you are not satisfied with the settlement price, we can continue to negotiate!" Gorman still refused to give up.

"Mr. Gorman, there is actually a way to achieve a win-win situation! Morgan Stanley will work with other brokers to boost the market, and we promise to reduce our holdings in an orderly manner and never smash the market! In this way, you can make profits through multiple orders of CFDs in your hands. We can also make back the money lost on short orders by reducing our shareholdings..." Yang Mo started digging holes for Gorman again.

Gorman shook his head and said: "This is unlikely. Other brokers do not have enough long orders for Nasdaq CFDs. How could they cooperate with Morgan Stanley to buck the trend and boost the market?"

Yang Mo chuckled and said: "This is easy to handle! Zhiyuan Group can continue to open attractive CFD short orders to attract them to participate in raising the market. Zhiyuan Group's reduction of holdings can also cooperate with you and let the stock price fluctuate violently. Some investors who used financial leverage were liquidated..."

Brokerages and listed companies cooperate to cut leeks, which is the most common trading method in the capital market. Yang Mo's words gave Gorman a glimmer of hope for a comeback.

After pondering for a moment, Gorman said: "Mr. Yang, if the short CFD orders you come up with are attractive enough to attract some small and medium-sized institutions to participate in the transaction, this plan will be implemented with greater certainty!"

"Attracting small and medium-sized institutions to participate in CFD trading? Mr. Gorman, are you a little too greedy?" Yang Mo chuckled.

Gorman's wishful thinking is that he does not need to share a piece of the pie with other securities firms, but directly persuades small and medium-sized institutions to go long, so that they can take over the shares reduced by Zhiyuan Group. Morgan Stanley will increase the market before the settlement day, and after eating Expand the long position and then take the short position...

"Mr. Yang, only in this way will someone support the market for you when Zhiyuan Group reduces its shareholding. Don't worry, Zhiyuan Group and Morgan Stanley are not rivals, and your short CFD orders are safe!" Gorman explained road.

After Yang Mo thought for a while, he said as if he had made a lot of determination: "Mr. Gorman, I will make a bet with you and sell 5 Nasdaq futures and 5 Dow Jones one-year spreads at the market price. Short contract, $7.8 million in margin, I will deposit it into Morgan Stanley's dedicated trading account as soon as possible..."

Gorman and McHarvey looked at each other, Zhiyuan Group is really wealthy! As soon as I made the move, I was left with 10 empty orders...

After a brief daze, James Gorman said hesitantly: "Mr. Yang, the CFD business, as an over-the-counter financial product trading market, has limited capacity. Now the U.S. stock market is in a bear market stage. If the contract itself is not attractive enough, I am afraid that it will not be accepted." Without such a large transaction volume..."

Yang Mo chuckled and said: "Mr. Gorman, I understand that opening a position on the Chicago Board of Trade also requires trading costs. We will use the closing price of the day before signing as the benchmark, and sign the contract with a discount of 5-10 points. This is enough. Attractive?