In recent years, with the sustained high-speed economic growth of China and other Asian emerging market countries, the import demand for raw materials such as metals has greatly increased. Speculative funds, with hedge funds as the main force, have successfully forced positions on the so-called "China factor" again and again.
The futures market has its own rules of the game. By understanding the operating rules of the futures market, investors can have a general judgment on the direction and range of futures commodity prices. By investing in the corresponding stocks, we can achieve the goal of sharing the forced position. Characteristics of a successful warehouse closure operation
Forced liquidation is a unique operation mode of futures market, that is, one party forces the other party to admit defeat in the futures market by controlling the spot (deliverable spot) market. There are two kinds of forced liquidation, namely, bulls versus bears and bears versus bulls. The usual operation is to force more space, which can be understood as "hoarding".
The timing of bulls' choice is to collect cash when supply and demand are basically balanced or in short supply, thus causing a serious situation of short supply. Usually hedge funds will force positions to choose varieties with relatively small output. Hoarding a part of the spot will aggravate the tight supply in the market. And to push up the price, forcing short sellers to buy the spot at a very high price to complete the delivery, or cut off their future positions at a high level. As long as the bears don't give up and leave, the market won't end, which is why the prices of some commodities sometimes go crazy. It was not until the opponent was eliminated that the price began to fall.
In the process of forcibly opening positions, commodity prices are usually separated from the influence of fundamentals, and prices continue to break through, running in ultra-high areas that deviate from the relationship between supply and demand for a long time. This will also bring huge profits to the enterprises that produce these goods. By investing in the stocks of such companies, you can share the relevant benefits brought by forced positions. Stock market opportunities brought by forced positions.
The forced opening of positions in the international futures market has brought long-term investment value to the non-ferrous metal plate in the domestic A-share market.
In recent years, an operating mechanism has been formed in the market to buy and sell stocks of listed companies according to the rise and fall of commodity prices, which makes the stock prices of listed companies have a strong correlation with metal prices. As can be seen from the price changes in the market, mainstream funds are still very enthusiastic about tapping the intrinsic value of non-ferrous metal plates.
Due to the misjudgment of the persistence of metal prices, from the perspective of positions, some institutions still step on the non-ferrous metal plate. However, with the rising price of metals, it is the general trend to allocate high-quality stocks in this industry. Related issues needing attention
Investors should also pay attention to possible related problems while sharing the rich dividends brought by hedge funds' forced opening of positions:
1. Systemic risk. The rapid rise of China stock market has accumulated a certain market bubble, and the systemic risk of the market is getting bigger and bigger. The systemic risk of economic recession in major industrial economies cannot be underestimated. The possible expectation of economic recession will lead to a sharp drop in commodity prices.
2. The price plummeted after the forced opening of positions. Usually, a successful forced liquidation will end in shorting the main force and cutting out the position. After the compulsory warehousing, the prices of varieties that are usually compulsory warehousing will drop sharply. The speed of this decline is very fast, and sometimes the price may fall by more than 20%-30% in several trading days. Therefore, in the process of falling prices, investors can appropriately reduce their stock positions and avoid related risks. However, for a long time, even after a sharp drop, metal prices will not fall back to the price range of a few years ago. Moreover, this price range is far from the production cost of metals, so once the price rises, this kind of varieties will regain their investment value.
3. Release of interests of listed companies. When investors choose metal stocks, they should pay close attention to the related transactions between listed companies and parent companies, as well as the transfer and release of benefits brought about by them. Undoubtedly, after three years of rapid price increase, listed companies must have accumulated considerable profits, and whether these profits are willing to be released in the performance of listed companies will undoubtedly be the key issue for non-ferrous metal plate investment.