With deep curiosity, Wu Maocai brought a middle-aged man in his forties who looked thin and slightly haggard to Fang Chen.

Fang Chen raised the corners of his mouth slightly and looked up and down at this legendary trader and devil trader in his previous life.

If taking losses is a compulsory course for traders, then Yasuo Hamanaka is probably the best in the world in taking this course, and is also the first trader in the world to be sentenced to seven years in prison for a "mistake" in trading.

But before this huge failure comes, we should talk about Hamanaka Tainan's brilliant record.

The titles "Mr. Copper" and "Mr. Five Percent" mentioned by Wu Maocai just now are enough to prove Binzhong Tainan's status in copper futures and even the entire non-ferrous metals trading.

After all, you must know that copper is the nonferrous metal with the widest range of applications and the largest trading volume in the world.

And Hamanaka Tainan holds long positions in copper from one million tons to two million tons all year round. Based on the current copper price of US$2,500 per ton, these long copper positions in his hands are worth as much as five billion.

US dollars to US$10 billion.

However, this is just a constant of the long copper position in the hands of Hamanaka Tainan. Its most glorious period was from last year to this year.

The London copper warehouse receipts in his hands accounted for 90% of the long London copper warehouse receipts at the highest point.

This is a very scary number, and its value will be calculated in hundreds of billions of dollars.

The London Copper Exchange is the largest copper exchange in the world, and its trading prices can almost be said to control the world's copper futures prices.

So since Hamanaka Tainan has mastered 90% of the long London copper warehouse receipts, it means that Hamanaka Tainan is able to control London copper, and even the copper futures price around the world.

It is precisely because of this that in just two years, Binzhong Tainan raised the price of copper futures from US$1,600 per ton to US$3,000 per ton, nearly doubling the price.

Companies around the world that need to use copper have paid hundreds of billions of dollars in costs, while Hamanaka Yasuo, the world's largest copper production company behind him, Sumitomo Corporation and other copper producers and copper mine owners have gained

Hundreds of billions of dollars in additional compensation.

In fact, Hamaka Tainan's method of raising copper prices is not commendable. Instead, it can be called very violent, even bloody!

The futures market is different from the domestic stock market. The domestic stock market can only go long but not short, while the futures market can do both long and short.

What is long and short?

Going long refers to being optimistic about the future rising prospects of stocks, foreign exchange or futures, buying and holding, and waiting for profits to rise.

Short selling refers to foreseeing that stocks, foreign exchange or futures will fall in the future.

So first borrow the underlying asset, then sell it to get cash. After a period of time, after the price of the underlying asset drops, you can buy the underlying asset at a cheaper price and return it to the lender.

The price difference is the profit of the short seller.

This creates a new trading term, which is counterparty.

Whether you are long or short, you need to have an opponent. Only when the opponent recognizes your price can the transaction be completed and the operation possible.

For example, the current price of copper in London is US$3,000 per ton.

If you are bullish in the later period and think that London copper can rise to 4,000 US dollars per ton, so if you want to buy London copper, you must have someone who thinks that the price of London copper at this time has reached its peak and is about to fall, and then sell

How about selling the London copper warehouse receipt?

Only when one buys and one sells can it be called a transaction.

Suppose that everyone thinks that the price of copper in London is rising, then those who have warehouse receipts will definitely be reluctant to sell. If there are no warehouse receipt transactions in the market, then naturally no one will be able to make a transaction.

This phenomenon will not end until someone feels that the price is too high and the price of London copper will turn down and sells the warehouse receipt in hand.

On the contrary, the same principle applies to short selling. If everyone thinks that the price of London copper will fall, the action must be to sell, and there will be no bullish bulls to pick up their warehouse receipts, and their orders will not be completed.

Fortunately, the trading market is really huge, with hundreds of thousands or millions of people trading on it every day. Naturally, it is impossible for everyone to have the same mind and look for the same direction.

If you don't recognize this price, naturally others will recognize it. Even at the same price, there are countless people in the market doing long and short sales at the same time, thus releasing a huge trading volume.

But one thing to know is that for those who are long or short at the same time, the money they make is the money lost by their opponents.

This is why the stock market, futures market, and foreign exchange market are called zero-sum games. If handling fees are taken into account, they can even be called negative-sum games.

After explaining some basic concepts, the topic returned to Hamanaka Tainan's operation on London Copper.

As mentioned before, Binzhong Tainan holds 90% of the long positions in London Copper, which means that short sellers cannot find enough other long positions to close their positions, so they must follow the warehouse receipt price in Binzhong Tainan's hands.

Give up, pay money and leave.

Of course, they don't have to close their positions according to Hamanaka Tainan's price. After all, futures are actually designed to ensure that real-life transactions can be carried out better.

For example, take the raw material copper.

The manufacturing company is worried that the price of raw copper will rise in the future. According to the price at this time, it pays a certain deposit to the copper processing company and agrees to pick up the goods at this price one month later to carry out hedging. This is the futures

nature.

As for why there are rises and falls, making money and losing money.

This is because, if the price of copper rises next month, does that mean that manufacturing companies make money, while copper processing companies lose money?

If copper prices fall, the opposite is true.

Therefore, the futures itself provides the function of physical delivery. If the short seller does not buy the warehouse receipt to close the position, he can buy the corresponding number of warehouse receipts in his hand from the real market before the warehouse receipt expires.

Copper raw materials can be stored in the warehouse of the exchange.

However, the same is true for the bull. If he can't find a short position to close, he can go to the London Exchange's warehouse and take away the corresponding amount of copper raw materials according to the number of warehouse receipts in his hand.

But this obviously costs a lot of manpower and material resources, especially for some relatively large traders. The warehouse receipts in their hands are calculated in 100,000 tons. With so much copper raw material, transportation, logistics, warehousing, and sales are all a big problem.

, the loss is much greater than the cost of closing the position and admitting a loss.

As for not closing the position, but holding it until the price returns to a price where you won’t lose money before selling, is that okay?

In the stock market, you can do this. As long as you don't buy or sell, your stocks will always be yours.

But this is not possible in the futures market. As I said just now, the function of futures itself is hedging, which is a behavior of temporarily replacing physical transactions with futures trading.

Therefore, there will be a delivery time on the futures warehouse receipt. When the delivery date comes, the position must be closed, just like a real transaction. When the delivery time comes, you can't say that you won't give someone the goods or money, right?

Generally speaking, futures traders will close their positions before the delivery date, and then purchase all warehouse receipts for the next month or the next month, including one year, at this price.

This behavior is called moving positions to change the month.

This is also the reason why in the previous life, in the Bank of China's "Crude Oil Treasure" incident, users not only lost all the margin in their accounts, but even had to lose additional money.

At that time, Bank of China bought the U.S. oil futures contract for delivery on April 21. However, around 0:00 on the 21st, because by the delivery day, short sellers who could take orders had already moved their positions to another month, resulting in extremely few short sellers, and positions like Bank of China's were

There were many long positions, so in order to close their positions, there was an unprecedented large number of long selling orders.

In just four hours, oil prices dropped from US$11 per barrel at 22:00 on the 20th to an unprecedented US$0.

However, this was only the beginning of the plunge. From 2:08 to 29, the price of U.S. crude oil futures fell below -$10, -$20, and -$30 in turn, reaching the lowest price of -$40.32 at 2:29.

The reason why short sellers were able to dominate this unprecedented plunge is actually very simple. It can even be said to be the same method used by Hamanaka Tainan to manipulate London copper prices just mentioned.

The few short sellers controlled all the short orders in the market and ignored the long calls, forcing the long sellers to lower their prices. It was not until the long sellers lowered the price to -$40.32 in order to close their positions that the long sellers' prices were reduced.

The warehouse receipt is eaten.

Of course, at -$10, -$20, etc., even from $11 to -$40.32, there are a certain number of shorts who can't resist the temptation and make deals with the longs, but the general idea is still as mentioned above.

After all, you must know that at that time, because of the plummeting oil prices around the world, all oil tankers and places to store oil were full. The bulls just wanted to not close their positions and go to the U.S. oil futures warehouse to pick up the goods. They couldn't do it.

It's in the warehouse.

The storage fees charged by warehouses, customs, and transportation fees are often more than -$40.32.

In other words, the shorts know that the longs cannot make physical delivery, so they are unscrupulous and do not close their positions with the longs.

Finally, the next day, the Bank of China announced that the final settlement price for "Youbao" customers was -$37.63, forming a substantial shortfall.

And because futures are naturally leveraged, these "oil treasure" customers not only lost all the margin in their accounts, but also continued to lose money.

The lesson learned from the whole incident is that if the Bank of China could move the position to another month earlier, this tragedy could have been avoided.

However, if the "oil treasure" incident above was just an accident, then Tainan Hamanaka, who has long controlled 90% of the London copper warehouse receipts, has turned this kind of thing into a long-term pain for short sellers.

As long as short sellers open a position, they will be forced to close it at Hamanaka Tainan's bidding price.

So for a while, there was only one voice in the entire copper futures market, and that was to follow Binzhong Tainan to do long copper prices!

This is also the reason why the price of copper has nearly doubled in less than two years.

But obviously this kind of unilateral market trend will not last long. If the futures price is far away from the support of spot cost, a bubble will occur, and naturally there will be big short sellers targeting it.

In early 1995, when copper prices rose to US$3,075, Soros's Quantum Fund, Robinson Tiger Fund, Canadian metal trader Herbert Black, American fund Dean Witter and some large European metal traders, etc., focused on Hamanaka Tainan.

In early 1995, when the London copper price was above US$3,000, all parties in the United States and Europe jointly began to gradually sell off and suppress the price to a minimum of US$2,600.

But at this time, Hamanaka Yasuo showed his powerful power as "Mr. Copper" and the tough character of "Hammer". He almost single-handedly fought against these European and American coalition forces and raised the price of copper to more than 3,000 US dollars again.

.

Soros and other European and American coalition forces liquidated their positions one after another and declared failure.

It can be said that this was the most glorious time for Hamanaka Tainan. Almost no one could defeat such a huge European and American coalition, but he did it.

However, this was the beginning of his personal tragedy and the tragedy of Sumitomo Corporation.

Since they couldn't beat Hamanaka Yasuo financially, Soros and others looked for ways elsewhere.

Four months later, the U.S. Commodity Futures Trading Commission began an investigation into Sumitomo Corporation’s abnormal trading in the U.S. Treasury and copper futures markets. Following notification and pressure from the United States, the London Metal Exchange also began an investigation.

Under the pressure of the investigation, London copper prices fell, falling to around $2,420.
To be continued...