Chapter 668: The Green Brothers Company Pulls Out!
The impact of the Fed’s rate hike was massive, and its effect on the gold futures market was nothing short of catastrophic!
By the close of trading on the 23rd, the price of futures contracts on the New York gold futures market had plummeted to $32,000 per contract, equivalent to $320 per ounce.
This represented a drop of over fifty dollars from the opening price that morning.
The downward trend in prices did not come as a surprise to Li Yi, but what did surprise him was that Reggie Green—who had long been planning to cut his losses and pull out—actually held his ground in the face of such low prices.
In Li Yi’s view, once the gold price hit $320 per ounce, Reggie Green’s personality suggested he would almost certainly pull out.
However, although the guy was itching to act, he ultimately held back—which really made Li Yi look at him with newfound respect.
At this stage, Reggie Green’s performance had already left Zhou Yang quite satisfied.
He could now entrust the company to his management with peace of mind.
If he’d kept a closer eye on things, perhaps the Green Brothers Company wouldn’t have followed in the footsteps of its predecessor and gone bankrupt.
But Li Yi knew it was still too early to dwell on that.
The immediate priority was to successfully complete this investment and secure those billions of dollars in profits!
The next day, the impact of the Federal Reserve’s interest rate hike continued to be felt!
On the New York gold futures market, prices fell steadily from the moment trading opened this morning.
Although the rate of decline was much slower than yesterday’s, by 2:00 p.m., the price had still fallen to $302.
Just as Li Yi was waiting for the price to officially break below the $300 mark, Reggie Green approached him with the idea of closing out the position.
Li Yi didn’t say much in response, but told him to decide for himself!
Although closing out the position now might result in significant losses, Li Yi didn’t stop Reggie Green, because he knew full well that the future of the Green Brothers Company depended on Reggie Green, not him.
He could stop him this time, but what about next time?
He couldn’t stay in New York every moment, so Reggie Green would be the one making decisions most of the time; taking a small loss now might not be a bad thing.
Besides, in Li Yi’s view, it was already remarkable that Reggie Green had managed to get this far—after all, not everyone shared his insight into the broader trends and the inevitable outcome.
Seeing that Li Yi didn’t intervene, Reggie Green immediately ordered his team to begin quietly buying up futures contracts on the market.
As Green Brothers increased the volume of their futures contract purchases, the market finally caught on. When they bought 150,000 contracts at $30,200, the price of the futures contracts—which had been falling—finally stopped its decline!
Immediately afterward, the price began to rise slowly.
By the time the New York market closed that afternoon, the price of futures contracts had recovered to $30,800 per contract.
By this point, the Green Brothers had purchased 210,000 futures contracts, still more than halfway short of the 456,000 contracts they needed to return to the institutions.
On the morning of December 25, Green Brothers suspended the purchase of futures contracts!
This was because Reggie Green had received word the previous afternoon that prices in Chicago had fallen below the $300-per-ounce threshold.
The reason prices in New York had rebounded against the trend was entirely due to his company’s actions.
Therefore, he immediately ordered his team to suspend the acquisition plan to gauge the market’s reaction.
Sure enough, without Green Brothers as a disruptive force, futures contracts on the New York gold futures market began to decline slowly once again.
However, some traders remained on the sidelines, so the price did not fall rapidly.
Yet, as the morning wore on, no one made any large-scale purchases of these futures contracts. When the afternoon session opened, the price of gold futures contracts plummeted once again.
By around 3:00 p.m., the price of a 100-ounce gold futures contract had fallen to $30,000.
Seeing this, Reggie Green immediately ordered his team to strike again, buying up these futures contracts on a massive scale.
In less than an hour, the Green Brothers Company had once again swept up 200,000 futures contracts from the market.
At this point, they were just over 40,000 contracts short of the 456,000 contracts needed for delivery.
However, as a result of their actions, the price of gold futures contracts on the New York market rebounded to $30,500 per contract.
Meanwhile, over 1,200 kilometers away in Chicago, the price of gold futures contracts had plummeted to $28,600 per contract.
If futures contracts from the Chicago gold futures market could be delivered in New York, Reggie Green would have considered buying them up in Chicago.
Fortunately, only a few tens of thousands of contracts remained—regardless of the price, there weren’t many left!
So, as soon as the market opened on December 26, Reggie Green issued an order to continue buying gold futures contracts, filling the remaining 40,000-plus contracts so they could be delivered.
With the Green Brothers’ aggressive intervention, the New York gold futures market saw a small rally early in the morning, with prices soaring all the way to $30,900 per contract.
However, once the Green Brothers had acquired all the futures contracts needed for delivery, there were no other major buyers in the market, and the price began to fall slowly again.
By the time the market closed in the afternoon, the price had fallen back to $30,400 per contract!
Meanwhile, gold prices in Chicago continued to fall today, with the price of a 100-ounce gold futures contract dropping to $28,000 per contract.
………
Wall Street. Green Brothers Headquarters!
In the large conference room, all of the company’s executives gathered once again.
Although it was already past quitting time, not a single person complained about the company encroaching on their personal time; everyone’s faces were beaming with excitement.
“Thump, thump…”
The sound of leather shoes hitting the floor echoed through the room, and then the conference room door swung open.
In walked the company’s president, Reggie Green, along with Vice President Li Yi and China Unicom’s Chief Financial Officer, Jimmy Marshall.
Seeing this, the employees who had been whispering to one another just moments ago tactfully fell silent!
Reggie Green, Li Yi, and the others made their way to the conference table and took their seats.
Reggie Green then spoke up: “Ladies and gentlemen, we successfully completed the settlement this afternoon. For this short position on gold, we invested a total of $2.084 billion, utilized 10x leverage, borrowed 456,000 gold futures contracts, and sold them at $44,800 per contract.”
“And today, we purchased the same number of gold futures contracts at $30,600 per contract and successfully settled the trade. After deducting exchange fees, transaction costs, and institutional funding fees, this investment yielded a total profit of $6.168 billion…”
“Clap, clap, clap…”
No sooner had he finished speaking than the entire conference room erupted in thunderous applause!
As the applause died down, Reggie Green spoke again: “Ladies and gentlemen, the success of this investment is owed to one person: our Vice President, Mr. Li Yi. Without his support, we might have missed this rare opportunity. Please give our dear Li a round of the warmest applause!”
“Clap, clap, clap…”
The conference room erupted in enthusiastic applause once more!
After delivering these formal remarks, Reggie Green began discussing profit distribution and employee incentives with the group.
In an instant, the atmosphere in the conference room grew electric…
………