Market makers hang high-priced "fishing bills"
(Reporter Luo, Chen Yongji/Taipei Report) On February 6, Taiwan stocks plummeted, making investors with options lose money whether they are long or short. Yesterday, hundreds of people organized a self-help meeting to protest at the Securities and Futures Bureau and the Insurance Center. The convener Mr. Fan lost12 million yuan, while Li and Lin lost10.2 million yuan and 400 million yuan respectively. The petition of the self-help society pointed out three major irrationalities: the lack of protection mechanism in the futures exchange, unreasonable cutting of positions, inaction of market makers, and high-priced "fishing slips", which led to innocent and miserable losses for investors and demanded that the competent authorities bear the responsibility.
According to FSC statistics, the amount of default in the option market on that day was as high as1444 million yuan, and * * * eighteen futures companies reported that investors defaulted, of which He Kang futures was the highest with 266 million yuan; According to the insurance center, there are currently 50 complaints and two applications for mediation, and the insurance center will try its best to help.
Among hundreds of investors, some failed to pay the excess losses, but they signed promissory notes with futures traders, their assets were falsely seized, or they received administrative orders from the court. Lawyer Liu Zuoshi, who submitted a pleading letter to the CSRC, said that this incident highlighted the lack of option price stability mechanism in the futures exchange, which led to the soaring prices of various commodities, and the seller investors of the bookmakers were forced to buy back and suffered disproportionate losses.
Mr. Wei (pseudonym) in the self-help meeting has six or seven accounts, which add up to tens of millions of losses; In addition, the three sisters in the north lost all the principal of 20 million yuan a day and were also recovered10 million; The most exaggerated thing is a surrogate operator. Because of the high leverage ratio, he made 6,000 bites with a deposit of 3 million yuan (generally 500,000 to100,000 is safer) and was chased by customers.
The futures exchange has developed a dynamic price stabilization mechanism to promote options next year. Liu Zuo said that the current Taiwan Province index option is 10% of the previous day's spot closing price, and the daily limit is about 1000 points on February 6; It is suggested that the increase of options should not exceed the increase of spot market on that day, for example, the market rises by 300 points on that day, and the increase or decrease of options should not exceed 300 points. This is rough, but investors should be protected at least until the dynamic price stability mechanism is on the road. (Futures exchange lacks protection mechanism)
The second point of the love letter is that layoffs are unreasonable. At present, the risk index (net value divided by margin) is less than 25%, but the criteria for futures traders to reduce their positions on the same day are different. Some of them cut all the positions in their accounts, some only cut positions with large losses, and some cut positions by machines. Because of the high speed, many positions are cut at the highest point, such as the price of 1000, which makes investors suffer a lot.
The third is that market makers not only give up their market-making obligations, but also make profits by hanging high-priced orders. Investors questioned that the self-operated department of futures traders should have provided orders at various prices so that the transaction price would not soar instantly, but many self-operated departments hung up the daily limit on the same day, so they made rich profits; Liu Zuoshi suggested that proprietary traders should not operate "market-making" and "proprietary" businesses at the same time to avoid conflicts of interest.
Trading rights rose as soon as they opened, and the banker was killed by both sides.
On February 6th, influenced by the collapse of US stocks in the previous trading day, Taiwan stocks plunged by 5,600 points in intraday trading. However, the option market was in chaos at 8: 45 before the spot opening on that day. Regardless of the call right or the put right, the price soared and the intraday price continued to soar.
For example, the call option with a value of only 1 point the day before soared to 1 thousand points in intraday trading; This makes investors who originally stood on the seller's side have to redeem at a very high price, and most of them are not voluntarily repurchased, but are forced to close their positions by futures traders because of insufficient margin; Many investors can't lose millions in their accounts, but they have to lose tens of millions.
It stands to reason that if the investment position of the option is a person who bets that the Taiwan Province stock will not rise, such as selling the option (that is, not bullish), it should be profitable on the same day and should not be closed; However, futures traders forced to close their positions at the "market price", and both the buying price and the selling price were pushed to the daily limit. "No matter whether the account position is long or short, it will have a chain effect. Whether you are bullish or bearish, as long as you stand on the seller's side, you will lose a lot. Afterwards, according to the estimation of futures traders, the loss of sellers in the whole market reached 4 billion yuan, and the default delivery (losing money but unable to pay) reached 654.38+04 billion yuan.
The seller takes high risks and recovers the deposit indefinitely.
The leverage ratio of futures and options is higher than that of Taiwan stocks. For example, a 1 share of TSMC stock in 240 yuan requires 240,000 yuan to buy 1 share in spot, and 96,000 yuan to raise 40% of the funds in spot; A TSMC futures is equal to two TSMC stocks, and the spot value of 480,000 yuan is only 13.5% of the margin, which is 64,800 yuan.
Options are more leveraged and their value is calculated in "points". However, due to the different price point and maturity date, it is difficult to compare with the proportion of funds; If we can see more clearly from the actual profit-loss ratio, for example, the market only rose by 1.3% yesterday, but the Taiwan Stock Index chose the option of 10700 points, which rose by 40% in a single day, and the profit exceeded the spot by dozens of times; However, the loss is also very tragic. On February 6, the put right of 8800 points was worth 0.4 points the day before, and the intraday investors closed at 1090 points, which was equivalent to a loss of 2000 times.
In addition, if the option is in the buyer, it will only lose the deposit at most; But standing on the seller's side is "limited profits and unlimited risks" and will be recovered after all losses.