The London Real Estate Dealers' Guild is located in the City of London. It is not a very tall building, but the entrance hall looks very simple and elegant. Behind the eight stone pillars going down from the third floor is the main entrance of the guild.
In London, most of the trade guilds with a bit of history set up their headquarters in the City of London. It is very likely that inside the shabby and inconspicuous old buildings here, there are trade guilds that control assets worth hundreds of millions or even billions of pounds.
The reason why he came here today is that Viscount Bute is going to introduce Barron to the Real Estate Dealers' Guild. As a member of the London Real Estate Dealers' Guild, the Bute family has the qualification to directly introduce one member to join every five years. As long as their proposal is not voted against by more than half of the members of the Guild, the other party will directly become a member of the Real Estate Dealers' Guild.
It can be said that since the establishment of this industry association, there has not been a case where a member of the committee has been rejected for membership. After all, as a member of the real estate developers' association, they would not risk the wrath of the world and make an outrageous recommendation.
"Lord Bute, you have done a great job in King's Cross."
As Barron was meeting Viscount and Viscount Bute and his wife in the hall and meeting members of other trade guilds, a burly middle-aged man came over with a smile on his face and said to Ian Bute.
Upon seeing him, Viscount Bute showed a respectful expression on his face:
"Your Highness, the Duke of Grosvenor, I am honored by your praise, but our little fight is nothing in front of you."
"Haha, you have done a great job. King's Cross is the most important urban renewal area in the UK in the next 20 years. It has great prospects."
Hearing the title of Viscount Bute, Barron realized that the middle-aged man with a hearty smile standing in front of him was the largest landowner in London. It was said that a quarter of London belonged to his family, and he also had countless properties around the world. The Duke of Westminster - Gerald Grosvenor.
Just as Barron was looking at the Duke of Westminster, the other party's eyes also happened to fall on Barron:
"What a handsome young man, this must be the Duke of Devonshire."
"Hello, Mr. Grosvenor, my name is Barron Cavendish."
Facing the other party's extended hand, Barron shook hands with it and said.
"Barron, I have dealt with your father several times. I am very sad about his unfortunate death, but you have been doing well recently."
…
In fact, Barron came here today just to make more connections, and there will not be any substantial cooperation.
After all, he inherited the family business in a hurry. Unlike other aristocratic heirs who were trained from childhood, what he lacks now is connections, which he needs to make up for slowly.
During this period, he also took time to participate in many activities, including charity dinners and gatherings of certain nobles, for this purpose.
After this meeting, Barron was also registered in the London Real Estate Dealers' Guild. At the guild meeting held at the end of the year, if the Butt family's recommendation was not opposed by more than half of the members, Barron would officially become a member of the London Real Estate Dealers' Guild.
As a director of Argent Real Estate Group, Barron is also eligible to join - because he holds a total of 20% of the group's shares, Barron has two seats on the board of directors, one is Barron himself representing DS Capital, and the other is Julia Moore representing the family trust fund.
"Your Highness, Miss Daisy just called you and asked you to call her back when you are free."
After hearing what his assistant Wang Yating said to him, Barron took the phone. He had asked the other party to keep an eye on the price of copper in London, so Barron walked to a slightly secluded place on the side and dialed Daisy's number.
"Boss, the price of London copper has exceeded 1,480 pounds today. Can we start building a position?"
"Very good, Daisy, first establish a position of 2,000 lots and observe. I will come over later."
London copper futures, each lot is 25 tons, so if the price is 1480 pounds per ton, the value of one lot is 37,000 pounds.
However, DS Capital cooperates with Barclays Bank and is able to use a 5% margin for short selling, which is equivalent to a 20-fold leverage. Barron knows that the highest price of London copper this round is around 1,500 pounds, so he starts to establish a position from 1,480 pounds and then gradually increases the leverage. This price is still very safe and there is basically no risk of a margin call.
If the margin is 5% like theirs, then to sell one lot of London copper at the price of 1480, only a margin of 1850 pounds is required.
They currently have 33 million pounds in funds, enough to borrow approximately 17,800 lots of London copper to sell!
Of course, when it comes to actual operations, it is certainly not possible to be so rash as to directly borrow all the funds to short sell. Instead, you should first establish a certain position, and then gradually build up the position based on the subsequent price trend. In this way, you will have enough margin in the early stages to avoid forced liquidation due to insufficient margin in the event of a black swan event.
In fact, whether it is futures or stocks, the bank's margin trading business is basically a risk-free way to earn commissions, because usually they will not wait until the extreme situation of your margin is exhausted before forcing liquidation. Instead, they will consider price fluctuations and notify customers in advance to increase margin when the margin is about to be liquidated. If the margin cannot be increased in time, the other party will decisively force liquidation to avoid loss of their own funds.
Investment products with extremely high liquidity, such as London copper, gold, and foreign exchange, are better off. If it is a stock with low liquidity, a large amount of liquidation in an instant will still have a great impact on the price, and banks always need to consider this.
To put it bluntly, even if there is a loss in the end, it will only be the client's deposit that is lost, and their own funds need to be absolutely safe.
In late July, it was almost time for London copper to start falling, so Barron instructed Daisy to pay attention to the price of London copper. Once it approached 1,500 pounds and reached above 1,480 pounds, she could start building a position. This price could ensure safety even with extremely low margin.
After attending the London Real Estate Dealers' Association meeting, Barron said goodbye to Viscount and Viscount Bute and went directly to the City of Finance, the securities investment department of DS Capital.
When he arrived, Daisy moved quickly and had already completed a short sale of 2,000 lots of London copper.
"The average selling price of these 2,000 lots is around 1,485 pounds. After we established the position, the price of London copper has been fluctuating between 1,485 and 1,490. It seems that our order volume has been fully taken. Do we need to continue?"
Listening to Daisy's words, Barron sat down in front of the computer and observed the trend of London copper.
Since July, the rise in London copper prices that began in the first half of the year has begun to slow down.
To say it has slowed down is only in comparison with the previous wave of rapid rise. The price is still rising slowly, and can take over their position orders, which shows that the current buying is still relatively strong, but should we continue to test it?
In any case, they need to complete their positions before the price reaches 1,500 pounds - he has no doubt that with the addition of his sell orders, the price of London copper can still reach 1,500 pounds.
After all, the London copper market is completely different from the Nasdaq stocks he bought before. His orders have little impact in such a market.
"Continue to increase positions and try to sell more than 5,000 lots today."
"Okay, Boss."