Life of Being a Crown Prince in France

Chapter 1194: Chapter 1100: Margin Call

The London Futures Trading Market is in turmoil.

Everyone is discussing the massive contract default event in the Prussian region, and no one dares to touch any contracts related to the Germanic Region.

Fortunately, the sugar at London Port is still being delivered normally, barely allowing the futures exchange to maintain operations.

The Robert-Cooper Trading Company, which specializes in the sugar trade in the Prussian region, has received hundreds of lawsuits, with the total compensation amount reaching over 700 thousand British Pounds and still increasing.

Meanwhile, some are still relentlessly taking all sugar contracts—Rothschild and others have gathered funds sufficient to buy 500 thousand tasks of sugar, yet they have only bought 300 thousand tasks, far short of the expected quantity.

Yes, their share was snatched up prematurely by panicked British people.

In the office opposite the London Futures Exchange, Petty stared blankly at the desktop, as if expecting a spring gushing sugar to appear there.

“My Lord,” the assistant cautiously reminded, “shall we continue issuing contracts?”

The last thousand tasks of sugar contracts from London Port had just been bought; at this time there was no sugar available for purchase in the futures exchange.

Petty’s hands were clenched, veins popping, and his eyes bloodshot.

He originally held over 400 thousand tasks of sugar, enough to drain the funds France could use to kill short positions, but the day before yesterday Boris sent a report saying Prussia refused to sell sugar, and contracts there would face widespread default.

After losing 400 thousand tasks of sugar from Prussia, he was left with less than 23 thousand tasks of sugar shipped back from India, while French capital greedily eyed this last bit of stock.

He suddenly let out a discontented growl, why would the Prussians betray the British when victory was assured?!

The French have already invested over 180 million French francs, which absolutely exceeds France’s financial capability, but at this time they went bankrupt first…

France regained its monopoly position in the sugar trade, it is conceivable that sugar on the Paris futures market will soon rise to a high of 4 francs per pound or even 5 francs.

At that time, France would dump the low-priced sugar previously purchased from London, immediately plugging the fiscal deficit.

“My Lord…”

“Shut up!” Petty shouted angrily at his assistant, grabbed his hat, and slammed the door to leave.

Ten Downing Street.

The senior members of the British Cabinet all looked grim, their heads bowed in silence.

After a long time, William Pitt Junior looked at the Finance Minister and asked, “Lord Petty, how much sugar stock do we still have in the London Warehouse?”

The Finance Minister was taken aback for a moment, then said after a brief recollection, “About 200 thousand tasks, or perhaps 220 thousand tasks.”

Futures transactions take a long time to result in a real trade; until then, they are just contracts on paper. Therefore, there is still quite a bit of sugar piled up in the warehouse at this time.

William Pitt Junior then turned to Grenville: “Prime Minister, it seems we have lost the possibility of controlling the sugar market.

“Then, we should try to cut our losses now.”

“What’s your meaning?”

William Pitt Junior took a deep breath and said, “Immediately halt the sugar delivery from the London Warehouse, transferring all defaulted contracts to the Robert-Cooper Trading Company.”

In futures trading, there is no need to disclose the identities of buyers and sellers. Only when defaults occur is the identity of the defaulter revealed to pursue losses.

As long as the London Futures Exchange conducts a little underhanded operation, it can concentrate the default situation on one company.

Grenville’s pupils contracted: “No, no, that’s absolutely not okay! The Robert-Cooper Trading Company has assets of over 500,000, and it is His Majesty the King’s…”

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Futures trading is developed from spot trading based on forward contract trading, which is an advanced trading method. It refers to the transfer of market price volatility risk, to deal with those large-volume homogeneous goods, through brokers in the commodity exchange, in the form of open competition to buy and sell futures contracts.[1] Futures, usually referring to futures contracts, is a contract. It is a standardized contract formulated uniformly by the futures exchange for delivery of a certain quantity of the subject matter at a certain future time and place. This subject matter is also called the underlying asset, which corresponds to the spot in the futures contract, and can be certain commodities, such as copper or crude oil, it can also be a financial instrument, such as foreign exchange, bonds, or it may be a financial index, such as the three-month interbank lending rate or stock index. Futures trading is an inevitable product of market economic development to a certain stage. Futures trading is the activity or behavior of buying and selling futures contracts. Pay attention to the difference, futures delivery is another concept, delivery is the exchange activity or behavior of the subject matter (underlying asset) as specified in the futures contract content on the due date.

Futures trading is developed from forward contract trading in spot trading for commodity producers to avoid risks. In forward contract trading, traders gather at the commodity trading venue to exchange market information, find trading partners, and sign forward contracts through auctions or bilateral consultations, completing obligations through physical delivery when the contract matures. Traders, in frequent forward contract transactions, found that due to price, interest rate, or exchange rate fluctuations, the contract itself had price differences or interest differences, thus it was entirely possible to profit by trading contracts without waiting for physical delivery to gain profits. To adapt to this business development, futures trading came into being. Futures trading is a trading method of buying and selling various standardized commodity contracts in the futures exchange after investors pay 5%-15% deposit margins. Ordinary investors can achieve profits through low buying and high selling or high selling and low buying. Spot enterprises can also use futures for hedging, reducing enterprise operation risks. Futures traders generally conduct futures contract buying and selling through brokerage firms, and in addition, the obligation that must be undertaken after buying and selling contracts can be lifted through reverse trading behavior (hedging or closing positions) before the contract expires. 01:34 Have you seen auction-style, open shout futures pricing system? Historically, futures transactions were conducted orally and shouted by traders in the trading hall. Most futures transactions are completed through electronic trading, and during trading, investors input buy-sell orders through the computer systems provided by futures companies, matched and completed by the exchange’s matching system.

The procedure for entering the futures market is approximately the same as the stock market. Regarding customers, usually, a brokerage company handles their futures buying and selling business. Futures investors first open a futures trading account with the brokerage company, sign a standard “futures trading agreement” and fill out customer registration, deposit the needed margin; this completes the procedure for opening a trading account.