With Lehman Brothers as the fourth largest investment bank in the United States, as well as the current price of more than $80 per share and its outstanding performance in the past 100 years of history, I firmly believe that no one will think that it will fall below $10 per share in 20 months, and will also take the step of actively proposing bankruptcy protection.

The market maker will certainly agree to make such a bet deal with him. For this reason, he does not have to pay in full.

Marx mentioned in "Das Kapital" that as long as there is 10% profit, capital will be used everywhere; if there is 20%, it will become active;

50% will cause positive risks; 100% will cause people to be desperate for the law; 300% will make people not afraid of crime or even the danger of hanging their heads.

In Masaki Nakamori's view, Marx in that era was unable to see the madness and greed of modern financial capital with his own eyes.

In fact, stock options are based on 100 shares. When quoting, they are conducted at 1% of the price of the entire contract.

When the market value of Lehman Brothers' stock is $80, it is calculated based on the quotation of one stock option of 1%, which is $0.8 per share, and the trading price of a 100-share option contract is $80 (the target price). This is equivalent to adding 100 times of leverage.

Twenty months later, if the decline in Lehman Brothers' stock fell below $10 (exercise price), when the market value is $8 per share, it is another ten times, which means you can make 1,000 times the profit.

Among them, the annual interest on the two years of mortgage to the bank, stamp duty, handling fees, etc. will be deducted. At that time, just like this, I will have 100 billion yen.

Even if Lehman Brothers' stock rises more than the premium it gives to the market maker during the contract period, it will not trigger a forced closing or liquidation situation. After all, what I bought is the price of this stock at a future time point, not the current price.

If the trading time agreed by both parties twenty months later (the day when the option agreed by both parties expires is called the "expiry date", if the option can only be executed on the expiration date, it is called the European option.

If the option can be executed at the expiration date and any time before it is called an American option), the Lehman Brothers short options you bought from the market maker did not fall below $10 per share, and you can also choose not to exercise the short options, which is equivalent to allowing the market maker to earn his or her own premium in vain.

From this we can see that playing options contracts is more than 100 times more exciting than playing stocks. Masaki Nakamori believes that he is right. That situation will not happen. His entire plan is more than that.

If this global financial crisis comes too fiercely and directly kills the market makers who bet against you, it will also lead to a loss of money.

Therefore, in order to prevent the risks to the greatest extent, he would go to a wholly-owned insurance subsidiary of Sumitomo Mitsui Financial Group to buy a credit default swap, that is, CDS.

Masaki Nakamori knows that for ordinary people, it is still a matter of knowing the term "credit default swap" after the global financial crisis.

In fact, on March 24, 1989, the US Mobil cruise ship Valdez appeared before the huge compensation was paid in Prince William Bay, Alaska, USA. However, it was not called CDS at the time. After this incident, it was called CDS.

Masaki Nakamori's purpose is that once a market maker who bets against him defaults, he can pay full compensation for personal losses from the insurance company under Sumitomo Mitsui Financial Group.

Of course, professionals in the insurance industry under Sumitomo Mitsui Group are definitely not stupid, they must know some of the risks involved.

Even so, Masaki Nakamori believed even more that the other party would definitely sign a contract with him for credit default exchange. In fact, the reason is very simple.

Professionals in the insurance industry under Sumitomo Mitsui Group will not think that RB is strong or that the well-known and old-fashioned market maker has defaulted, and will also have a consistent view with market maker. The stock of Lehman Brothers, the fourth largest investment bank in the United States, will never fall below the price of US$10 per share in 20 months.

To this end, Masaki Nakamori only needs to pay premiums on time and on a regular basis according to the contract agreed by both parties, and a total of 20 months is enough.

His entire plan is perfect. Even if the market maker goes bankrupt, runs away, and makes a debt, there will be no big deal that Sumitomo Mitsui Financial Group will rely on its own debt.

This also explains why Masaki Nakamori only used 100 million yen of the 140 million yen obtained from the mortgage-secured loan as capital and margin for short selling.

The remaining 40 million yen, in addition to the premium you need to pay to the insurance company for 20 months, is used as a reserve fund and other uses.

Masaki Nakamori dared to go out and gamble, on the one hand, mainly relied on his personal ability to predict the future, and on the other hand, it was due to his professionalism in the financial industry in his previous life.

Otherwise, he would not be able to make such a complete set of detailed plans one by one. As long as things in this aspect do not change in the future, he will be able to make a steady profit without losing money.

Masaki Nakamori's heart is like a mirror. Only with more and more capital in his hands can he be able to play the increasingly larger and larger money game in the future.

For ordinary people, don’t touch any areas you don’t understand. Otherwise, you won’t know how to die?

Especially in the financial industry, it not only allows people to eat from beginning to end, but also allows them to bear debts that they will never pay back in their entire lives.

Akina Nakamori noticed that her son didn't concentrate on eating, saying, "What are you thinking?"

"I'm just thinking, what should I do next when I get rich?" Masaki Nakamori raised his head and looked at his mother sitting opposite him.

Akina Nakamori suddenly felt a little amused and said, "Why don't you think about it? What if you lose all of it?"

Masaki Nakamori smiled at her and said, "It won't happen."

Although Akina Nakamori was a relatively simple woman, she was not so simple that she completely believed her son's words.

In her opinion, if he didn't let him do it, he would never give up and study in college with peace of mind, making it even more difficult for his son to be down-to-earth and work step by step.
Chapter completed!