The Chaebol Who Flies From Space - Chapter 30



Only Noblemtl

30. Crude Oil Futures Trading

My father, who had been thinking about it for a moment, scratched his forehead.

“We’re also short on funds. The company is making a profit, but not to that extent.”

“I have to join forces. The original investment purpose was to reinvest the funds brought in from China.”

“The toads are making huge profits in China. The Chinese government won’t just sit by and watch.”

“I think the Chinese government is starting to interfere, so I’m going to put a stop to it. I’m not going to withdraw money.”

As economic growth was in its early stages, the Chinese government reacted sensitively to foreign capital outflows.

If you want to send money overseas in excess of a certain amount, you need separate approval from the government. You can’t send it all at once.

In the early days of exports, the Russian mafia was the problem with remittances, but now the Chinese government is the problem.

The brakes are slowly being applied.

In this case, it would have been better to have been the first to invest in China so that neither side would have to blush.

“Should I ask Li Xun?”

Li Xun, a senior member of the Chinese Communist Party, and my grandfather knew each other. Their fathers were friends.

His great-grandfather was doing business in Manchuria and knew Li Xun’s father.

Li Xun’s father, Li Jifeng, was a senior Communist who participated in the Long March and was an economic expert who was purged during the Cultural Revolution, but returned to the party with Deng Xiaoping and served as the head of the Finance and Economic Committee.

His only son, Li Xun, also served as director of the office of the party’s finance and economic committee before retiring.

The director of the Finance Committee’s office is at the deputy prime minister level. In many cases, the deputy prime minister also holds this position.

“I agree. Yongwon chose it, so there’s no way it could fail.”

“How much should I pay? I don’t have much cash right now. If I had known this would happen, I wouldn’t have bought the land last time.”

When my aunt worried that she had no cash, I stepped in. After all, the reason I gathered the family together and made the presentation was to create a family fund with a long-term goal.

“We will create a fund through WD Investment Trust and invest. Please carefully decide the amount you want to invest. Also, keep in mind that this is a long-term investment. Since I have the funds, if you want the amount, I will lend you for a long term. The reason for doing this is to create a family fund that my family members can invest in.”

“Oh my! It seems like Yongwon really has a lot of money?”

“You don’t know, but Yongwon is probably the richest among us. He probably has more money than my father.”

Although I didn’t tell you the specific amount, my father, who guessed that I was managing a considerable amount of money, smiled and bragged about it.

It was something my father and grandfather had heard about a long time ago, but the rest of the family didn’t.

“Oh my! You have more money than your dad? How on earth did you earn that?”

“Hyung, did Yongwon really earn that much?”

“I invested a little bit in the US market and it was successful. I am also investing in the oil market.”

My younger sister, who had been listening quietly, poked me in the ribs.

“Brother, if it’s a family fund, will you include me too?”

“Not only you, but Hye-ri should be included too.”

“me too?”

My sisters seemed surprised by what I said.

“Yes, you should join too. If the family members who are not present here want to invest, I will accept them all.”

In short, if you want to invest, everyone should apply.

Although he didn’t reveal the exact amount of money he earned, he hinted that it was a significant amount.

My family is not one where we fight over money, and we are quite frank when it comes to money matters.

Although rich families fight a lot over money, it’s the same in poor families too.

“Then, please don’t rush to decide on the amount you want to invest, as you have plenty of time. Once you’ve made up your mind, please contact me.”

Although the gathered family members argued and argued, the final conclusion was to pool together our spare money and invest it by adding a little bit myself.

Chicago in the winter is crazy cold.

Chicago was already called the Windy City because it had a lake right next to it. It was snowing at that time, so I almost couldn’t get anywhere at the airport.

Only when I finally arrived at the hotel could I breathe a sigh of relief.

“That’s why I didn’t want to come here. If you go to Chicago in the winter, you’ll probably get called crazy by people around you.”

[Anyway, you haven’t arrived yet. We don’t have much time, so we have to hurry.]

I sighed involuntarily at Ariel’s words that “Once you arrive, that’s it.”

All I could hear on the TV was some disheartening news, like a record-breaking cold snap hitting Chicago.

“What do you want to do next?”

[You need to create an office first]

“Didn’t you prepare it?”

[The master should do it himself.]

“……”

[Investing in crude oil is a task that requires extreme secrecy.]

“What’s the secret? So, are all the guys who trade crude oil futures spies?”

Ariel was busy playing spy, wondering where she had mistakenly seen the TV drama.

[Master, this is not a joke. The number of accounts secretly trading futures has increased. It seems that they are trying to secure positions in advance in preparation for the OPEC meeting. Oil price volatility has increased significantly.]

“Are you saying that those who know the meeting results are messing around?”

[That’s how we should see it. If we get involved, we might end up being the shrimp in a fight between whales.]

“That’s ridiculous. There’s someone out there who can hit you in the back of the head?”

I wasn’t so easygoing that I would fall for Ariel’s death cry.

The hotel I booked had a bunch of documents delivered in advance.

These were documents related to a paper company commissioned by brokers. Investment accounts were opened in European banks in the names of companies registered in Dalloway and the Bahamas.

As I checked the documents the employee brought me, a complaint came out of my mouth without me realizing it.

“It’s incredibly inconvenient. There are still too many places where the Internet doesn’t work properly.”

[There’s nothing we can do about it. This is a significant improvement.]

“I checked the accounts I created at CME and it looks like the trading preparations are almost done?”

[Aren’t you hungry?]

I had a simple sandwich as a substitute for a meal at the airport. I had completely forgotten about it, but when Ariel spoke, my stomach started growling.

“I wasn’t thinking about anything, but now that you mention it, I’m so hungry.”

[The weather is bad, so why don’t you go out and just stay at the hotel?]

“I’m thinking about that. If I go outside, I’ll get frozen. What’s the temperature now?”

[It’s minus 17 degrees.]

“······.It’s so fucking cold.”

[Still, it’s better than yesterday. Yesterday, the temperature dropped to nearly -30 degrees Celsius.]

On a windy and cold day like today, wandering around looking for a restaurant was out of the question.

The expansive lake view outside the hotel was just beautiful to look at.

No matter how cold or windy the weather was, what had to be done had to be done.

We even set up a trading line in the office we prepared.

From the outside it looked like an ordinary office, but once you step inside, it was full of high-tech equipment.

“Now that I’m done with everything, it feels like some kind of secret workshop.”

[It’s a secret operation, right? And once the deal is done, it disappears without a trace.]

“It was surprising that the computers were delivered on time.”

Order delivery delays are very common in the United States.

[Master, it is a given that it will be delivered on time. If you pay more, it will be easily resolved.]

“Now that we’re ready, let’s go back.”

I installed the program I prepared in advance on my computer. I made it so that the investment programs are automatically installed when the USB is plugged in.

I ate the food I had prepared while watching the 12 computers running and the programs being installed.

[The meeting is likely to ultimately break down.]

“Why? Wasn’t it decided to increase production before the meeting?”

[This meeting was called to reach an agreement on increasing oil production, but it looks like Iran and Libya will turn the tables at the end. The governments of both countries seem to be unhappy with the current drop in oil prices. They were instructed to stay silent at the beginning of the meeting and then lead to a breakdown at the last minute.]

Ariel had created a miniature arrival device in advance and distributed it to those attending the meeting.

It was easy to extract the meeting results in advance, as it was equipment that could not be detected by today’s technology.

“It seems that the governments of both countries want to spread ashes.”

[Iran and Libya did not like the Saudi-centered OPEC. It seems that they are unable to accept the results of a meeting with strong US influence like this.]

“Because oil prices are high, there’s no need to try to lower them. Both countries have serious fiscal deficits. That’s strange! Why did they push ahead with the meeting even though they knew the two countries would object… Ah! I see.”

It was understandable why Saudi Arabia pushed ahead with the meeting, even though it knew that it would not be able to smoothly reach a decision to increase production.

Saudi Arabia also seemed to have no intention of increasing production.

Oil prices are soaring for the first time in a long time, and I have no intention of adding fuel to the fire, but I have been forced to do so by pressure from the United States.

Saudi Arabia’s true intentions and the interests of Iran and Libya are, for once, aligned.

[In the beginning, I will bet on a decline, and from the middle to the end, I will change my position and invest in an increase.]

[The meeting has begun]

“Is it time?”

I turned on the TV at Ariel’s words. On CNN, the monitor was filled with negative news articles about the oil outlook. Most predicted that if OPEC decides to increase oil production as planned, oil prices will fall in the long term.

The increase in oil production is a response to pressure from the United States to stabilize prices as they have risen rapidly since the Iraq War.

Saudi Arabia is in a position where it absolutely has no choice but to watch the United States.

Under the patrol dollar system, which uses only the dollar as the currency for trading crude oil, the oil-producing countries’ true intention was to drive up crude oil prices to high levels.

Oil futures were on the rise but then stalled as they encountered strong selling pressure.

There was a strong selling wall at $27.40.

Ariel’s investment program took a sell position and hit the built-up buy wall hard.

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31

The pace at which gift indexes are being sold is accelerating.

Oil futures prices fell rapidly as buyers gobbled up the stocks they had placed in the face of strong selling pressure.

By simultaneously purchasing a large number of put options, the price was pushed up to $26, overcoming the thick wall of $26.5.

The crude oil futures market, which had been quiet while waiting for the meeting results, saw the emergence of a powerful selling force that moved violently, pushing down the price of oil futures.

As the $26 level, which was being held by strong buying forces, was broken, additional buyers who had been waiting poured in and ate up Iriel’s orders.

Short-term investment programs spewed out buy and sell orders in an instant.

Buys and sells were evenly balanced at $25.8.

[Change positions.]

By repeating buying and selling, I gradually gained an advantage in the buying position.

If you think the price will rise above $26, place a sell position.

If the price seemed likely to fall below $25.80, Ariel would mechanically repeat the order, alternating between long positions.

[Position change completed. Now prepare for the rise in oil futures.]

After completing the transaction, Ariel informed us of the results.

[Sold at an average of $26.9 and liquidated at $25.8. The average purchase price of the buy position is $25.9.]

[To date, the proceeds from the liquidation of futures and options transactions amount to $340 million.]

“How high do you think oil prices will go in the short term?”

[According to the price prediction program, if the meeting breaks down, it will go up to $30. It is predicted that there will be a short-term adjustment later, but it will safely go up to the $32 level.]

The purpose of trading is to get a buy position at a slightly cheaper price rather than to make a profit.

“How long do we have to wait for the price to reach that level?”

[We expect the expected price to be reached before maturity next month.]

It was a pretty satisfactory deal.

“Good job, Ariel.”

[Thank you, Master]

[Breaking News] Crude Oil Production Increase Agreement Fails

[Breaking News] Oil Prices Soar

[Breaking News] OPEC to hold talks later without meeting results.

As expected, as time passed and news spread that the OPEC meeting would end without any significant results, the price of crude oil soared.

The reaction in the futures market was more dramatic than in the spot market.

The futures price, which had been hovering around the $26 level, began to rise rapidly.

It went up through $27 and $28 without any hesitation, but then hit a selling wall at $29 and faltered, but then soared all the way to $30.

As arbitrage and boundary selling poured in, it briefly fell below $30, but the buying power did not die out.