Futures implement margin trading, and margin is divided into two parts, account opening margin and maintenance margin. Taking the heating oil futures that Zhou Yang is preparing to participate as an example, Merrill Lynch’s account opening margin and maintenance margin for each contract stipulated by the customer are US$2,150 and US$1,900 respectively.

In other words, Zhou Yang's trading account must have at least $2,150 in his trading account to buy or sell a contract for heating oil futures.

A standard futures contract represents a transaction of 42,000 gallons of heating oil. Calculated at $0.742 per gallon when Zhou Yang bought it, the actual value of a futures contract is $31,164. Zhou Yang was only frozen in margin of $2,150, which means that the leverage is 14.5 times.

The higher the leverage, the greater the natural risk. The $250 buffer between the account opening margin and the maintenance margin is only enough to cover the fluctuations in the futures price within US$0.006.

Once the heating oil rises and falls more than $0.006 per gallon, and Zhou Yang happened to guess the rise and fall situation wrong, Merrill Lynch will ask him to add margin, otherwise he will forcefully close the position.

In the five trading days before Zhou Yang entered the market, the closing prices of heating oil futures were US$0.751, 0.748, 0.742, 0.745, and 0.741 respectively. The gap between the highest and the lowest reached US$0.01. This is still the case when the market is relatively stable and the fluctuations are not very large.

Therefore, the risk of buying full positions is too great. When the market fluctuates violently, just a sharp rise or fall can make investors lose their positions instantly.

In the futures market, except for those hedging customers, they are all crazy gambling players. And the masters who can kill all over the world and escape unscathed are the real kings of gambling.

Zhou Yang knew his true strength very well. If he did not have the talent of a "prophet", he would be a Wushao who finished the game in three minutes.

So after opening his futures account, he did not rush to enter the market as soon as possible. Instead, he waited for a week and thought that a small drop was about to end, so he chose to enter the market on the sixth trading day.

The biggest difference between futures and spot is that the transaction contains time value. Even for futures of the same product, the prices in different delivery months are not the same.

Zhou Yang does not have much capital, so there is no need to diversify his position, so he only bought the bullish contract in December.

It is the end of August, and there is no sign of turning against each other immediately, but Zhou Yang remembers that the Iraq-Iraq War broke out around August and September this year. So he believes that the war will most likely start at the end of September.

Therefore, Zhou Yang believes that the contracts that were greatly affected by the Iran-Iraq War should be the three-month contracts of 11, 12, and 1. After all, heating oil is not oil, and the rise in spot prices requires a transmission process.

To put it simply, futures are investors' judgments on future spot prices. For most parts of the United States, December has entered the coldest period of winter and is also the best-selling month of the year for heating oil.

Therefore, it is reflected in the futures market. In December, the contract positions are large, the turnover rate is high, and the liquidity is good, so it is naturally the easiest to surge and plummet.

Otherwise, if you choose July and August in the hot summer, even if you want to build a large position, you may not be able to find your opponent.

Although Zhou Yang was full of expectations for the subsequent surge in heating oil prices, his investment strategy did not dare to be too radical. After the 2 million Hong Kong dollars proposed by Changhong Securities were exchanged into US dollars, he only transferred half of the futures account.

As for the remaining funds, Zhou Yang is preparing to invest in US stocks. The continued surge in crude oil prices means that the profits of most oil companies will soar, while taxi companies, long-distance bus companies are just the opposite. What soars is not profit but cost.

So Zhou Yang designed an investment portfolio for himself, buying oil stocks with heavy positions, shorting taxi companies, long-distance bus companies and other stocks. He did not leverage this time, and although he might not make much money, he won because he was safe and at least he could keep himself at the bottom.

Even for the 200,000 US dollars invested in the futures market, Zhou Yang did not dare to bet full, but only opened 70% of the positions. In fact, this position is too heavy for novices.

But Zhou Yang calculated that unless the price of heating oil futures fell below $0.715 per gallon, his position would not be risked to be forced to flatten.

From New Year's Day to now, the lowest price of heating oil futures has not fallen below $0.725. Therefore, Zhou Yang believes that he has left enough room for decline buffering. If he is still falling below the position, he can only admit that he is unlucky.

Zhou Yang spent three nights and communicated with Merrill Lynch's securities brokerage through international long distances to complete all the established operations of the stock account and futures account. All that was left was to wait patiently.

So to outsiders, Zhou Yang's life is quite comfortable. He sleeps until he wakes up naturally every day, and then goes downstairs to a Chinese restaurant in Xinducheng Building not far away for breakfast.

It was said to be morning tea, but the order Zhou Yang went to eat every day should be considered more suitable for lunch. After lunch, he went home to clean up and would carry a black sports bag on his back and a Haiou brand camera bought from Huafeng National Goods Store on his chest, wandering around.

Of course, Zhou Yang was not really wandering around, but was investigating Hong Kong's industrial economy. Forty years later, the mainlanders' industrial impression of Hong Kong was, besides the financial center, real estate was left.

When time goes back to 1980, although former industrialists such as Li Paopuo have transformed into more profitable real estate developers, Hong Kong's industry is still in the bright afterglow before the end of its glory.

According to data released by the Hong Kong-UK government at the beginning of the year, Hong Kong's total import and export trade volume in 1979 exceeded US$127.5 billion, an increase of 56% over the previous year.

Although the mainland reform and opening up brought about a surge in re-export trade, Hong Kong's manufacturing industry, represented by textiles, clothing, plastics, toys, electronics, clocks, etc., still contributed a large proportion.

Zhou Yang was engaged in export business before traveling through time, so he was naturally familiar with the factory. Although he did not speak Cantonese, English was the official language in Hong Kong, and most of the factories in Hong Kong mainly took on foreign trade orders, so it was not difficult for him to find someone who could communicate in English.

After World War II, the first wave of prosperity in Hong Kong's manufacturing industry began with the textile industry. During its peak period in 1967, there were as many as 11,000 textile factories of all sizes in Hong Kong, and the number of workers employed exceeded 430,000.

However, with the implementation of the global textile trade quota policy and the rapid rise in land prices in Hong Kong, Hong Kong's textile industry has declined rapidly since the 1970s.

The most unique part of Hong Kong's industry is that most factories are located in high-rise buildings. The high-rise buildings that often have dozens of floors in Hong Kong are not all residential buildings and office buildings, and a large part of them are industrial buildings specially used to run factories.

Many of the equipment in spinning mills and printing and dyeing factories are not suitable for moving to high-rise buildings, so it is not surprising that the textile industry is the first to decline.
Chapter completed!