SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : HONG KONG
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Chung Lee who wrote (2210)8/30/1998 3:12:00 PM
From: Ron Bower  Read Replies (2) of 2951
 
Chung Lee,

While the HKMA was buying, brokers were calling clients and advising them to take advantage of the opportunity to sell at levels higher than they would be seeing. Everyone was projecting that the HKMA would stop buying next week and the market would take a down turn.

The HKMA has gone long. At the same time they were buying stocks, they were also shorting October contracts to drive the price down and buying September contracts to drive the price up. This made it much more expensive for the hedge funds to roll over their Aug contracts into Sep, but the HKMA went long on the equities they were shorting at lower levels so they aren't hurt on price and don't need to buy to cover. They can also roll these positions into Oct at no cost.

Now they are planning to change the rules of the game to make it more difficult (if not impossible) and expensive for the hedge funds to roll the Sep contracts into Oct. (Changing the rules while the game is being played! Not fair, not fair!!)

Many of the sellers hoped to sell now and buy back when the market went down. Some were individual investors trying to capitalize on the fund activities. Short term the sellers will probably deposit the funds into high interest bank $HK deposits.

Interbank rates are fluctuating between 12-25%. Shorting the $HK probably won't effect the market. With new restrictions, funds will be unable to roll over Oct into Nov.

The current scenario presents a lot of potential buyers for equities and $HK this coming month.

Who would sell at lower prices?

What options do the hedge funds have?

Ron

Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News