I. Options-Typical Financial Derivatives:

Option is an investment tool and a right contract, which means that one party has the right to buy or sell a specific asset at a pre-agreed price;

The emergence of such financial derivatives is in response to the needs of many investors in the financial and physical investment markets. There are many varieties, covering a wide range of fields. The purpose of investors' investment is hedging rather than arbitrage.

Example: Mr. Liu wants to buy a suite with a total price of 300 thousand, assuming he doesn't have that much money on hand

Mr. Liu is willing to pay 25,000 yuan in exchange for his right to buy the house for 300,000 yuan in the next year. During the validity of the contract, Mr. Liu has the right to resell the contract to others. (Assuming that the owner allows 1 year, he only cares about the price of 300,000, no matter who buys it).

Suppose that after half a year, the house price will rise from 300 thousand to 500 thousand;

Mr. Liu has two choices:

1.300,000 to buy a house, sell it at 500,000 immediately, and earn 200,000. After deducting the previous payment of 25,000 yuan, the net profit is175,000 yuan, and the return on investment is 54%.

2. The profit from selling the house purchase right is 200,000 yuan, after deducting the upfront payment of 25,000 yuan, the net profit is175,000 yuan, and the return on investment is 700%;

Found the leverage effect;

Assume that the house price did not rise as expected and fell below 300,000;

Mr. Liu has two choices:

1. If it falls below 300,000 yuan, Mr. Liu gives up the right to purchase and loses 25,000 yuan;

2. It is expected that house prices will rise in the next few years, and the agreement will be implemented at a loss.

Suppose Mr. Liu has 300,000 cash:

Moreover, he knows the market very well and spent 25,000 yuan to buy a house in 12. The price of 300,000 is still rising by 500,000 in half a year. What does that mean? If all the rights are transferred,12×17.5 = 2 10000 yuan, the return on investment is still 700%, indicating that the same 300,000 yuan, the highest income can reach 210000 yuan, that is, there is a great difference between the income from purchasing real estate and the right to purchase real estate. It is also the reason why the financial derivatives market has created more speculators, because economic men are greedy for huge profits, afraid of losses and the risk of deviation from expectations.

Option is just a kind of financial derivatives, and the following example is also a typical business model of financial derivatives, which is a derivative tool to lock in future uncertainty. There are thousands of similar derivatives.

The second is a financial derivative tool used to lock in future uncertainties and risks-gambling agreement.

The recent losses in the aviation oil hedging business of Air China in China and China Eastern Airlines in China, the losses in the foreign exchange futures investment of CITIC Pacific and the losses in the aviation oil hedging business of Shennan Electric are typical derivatives investment cases. Take Shennan Electric Power Company as an example for in-depth analysis;

Looking at the reality of domestic financial derivatives investment from the Shennan power case and similar cases, locking risk has become manufacturing risk;

Background: Shennan Electric Power Company mainly produces electricity, and the fuel oil price of gas turbine power generation is affected by the sharp fluctuation of oil price in the international market. In this context, it signed an oil price gambling agreement with foreign financial institutions in an attempt to lock in the operational risks brought about by oil price fluctuations.

On June 65438+1October 2 1 day, 2008, Shenzhen Nanshan Thermal Power Co., Ltd. announced that:

Option contracts signed with Jierun (Singapore) Private Company, a wholly-owned subsidiary of Goldman Sachs Group Co., Ltd. on March 12, 2008; Failure to perform decision-making procedures as required, failure to perform information disclosure obligations in time as required, and alleged violation of mandatory provisions of national laws and regulations, Shenzhen Securities Regulatory Bureau of CSRC requires the company to rectify within a time limit.

Details are as follows:

On March 12, 2008, the company signed two contracts with Jierun Company, the main contents of which are as follows:

1, first confirmation:

The period of validity is from March 3, 2008 to 65438+February 3 1, which consists of three option contracts.

When the floating price (arithmetic average of the closing price of the New York Mercantile Exchange light crude oil futures contract in the current month) is higher than $63.5/barrel, the company can get a monthly income of $300,000 (200,000 barrels ×65438+$ 0.5/ barrel); Therefore, the annual price compensation can reach up to $3 million;

When the floating price is lower than $63.5/barrel and higher than $62/barrel, the company can get (floating price-$62/barrel) × 200,000 barrels of income every month; In this way, the maximum annual compensation is about 3 million yuan, and the minimum is 0.

When the floating price is lower than $62/barrel, the company needs to pay the price equivalent to ($62/barrel-floating price) × 400,000 barrels to Jierun every month.

The following table shows the actual oil price trend chart:

In fact, after the execution of the first contract, Shennan Power was compensated by Goldman Sachs because the average oil price in previous months was higher than $63.5. Before 1 1 month in 2008, Hong Kong Xingdesheng Company, a subsidiary of Shennandian, had received the compensation of $265,438+million from Jierun Company.

However, after 2008 165438+ 10, the crude oil futures price has fallen below $62/barrel.

According to the closing price of the main crude oil contract of new york Energy Exchange in June 2008 +0 1, the average price of crude oil in June 2008 was +0 1.745 USD.

According to the agreement, Shennandian will pay cash to Jierun in the amount of (62 USD/barrel-floating price) × 400,000 barrels = 65,438 USD+0,930,200 USD.

2. Second confirmation:

The validity period is 65438+1 October1,2009 ~ 2010 65438+1October 3 1, and the term is 22 months.

It also consists of three option contracts, and Jierun Company has options exercised before February 30, 2008 18.

When the floating price is higher than $66.5/barrel, the company can get a monthly income of $340,000 (200,000 barrels ×65438+$ 0.7/ barrel); If this happens, the annual price compensation is $4.08 million.

When the floating price is higher than $64.8/barrel and lower than $66.5/barrel, the company can get a monthly income of (floating price-$64.8/barrel) × 200,000 barrels; When this happens, the maximum compensation can be 4.08 million yuan, and the minimum compensation is 0.

When the floating price is lower than $64.5/barrel, the company needs to pay Jierun a fee equivalent to ($64.5/barrel-floating price) × 400,000 barrels/month. According to the price of 40 dollars per barrel, the loss can reach117.6 million dollars.

On the surface, this oil price gambling agreement will cause Shennan Power to be on the verge of huge losses or even bankruptcy, so its share price has been falling since the announcement of 10 in June 2008.

In this context, Shennandian made an unexpected decision. 165438+1On February 2nd, October 30th, it was announced that it would sell 0/00% equity of Hong Kong Xingdesheng Company/kloc-0 held by Shennan Energy (Singapore) to Shenye Investment Company under Shenye Group, and Xingdesheng was the company that received Jierun's payment in the gambling agreement.

Market participants believe that Shennan Power's move is aimed at selling the effective assets of its wholly-owned subsidiary, Shennan Energy (Singapore) Company, making it an empty shell. In this way, even if Jierun settles accounts after autumn, it may just be a shell company, and it is difficult to obtain practical benefits.

As early as 165438+200810.6, Jierun Company wrote that the announcement of Shennan Electric Power Company on June 65438+10.2/0.0/2008 and its announcement on October 29, 2008/kloc-0.

On June 165438+ 10/0, 2008, Shennan Electric Power Company replied to Jierun Company that it never indicated that it had no intention to continue to perform the transaction. It believed that Jierun Company refused to pay the amount payable to the company under the first confirmation letter of 65438+10 and explicitly terminated the transaction, which constituted a breach of contract, and announced it. At the same time, Jason Run Company, the owner of the company, did not exercise the option to require the company to enter the tripartite transaction when it was confirmed to be terminated by Jierun Company for the second time, which indicates that Jierun Company has given up or lost this option. Although the reasons for terminating the confirmation and transaction are different, there is no objection to the fact that the confirmation and transaction have been terminated.

After the termination of the transaction, Jierun Company sent a letter asking the company to compensate for the losses caused by the termination of the transaction, and the company replied that it would not be adopted. Jierun Company wrote that it hoped to settle the dispute through commercial means, and the company agreed to hold peace talks. At present, the two sides are negotiating and negotiating on matters after the transaction is terminated, but it does not rule out the possibility that the negotiation fails to resolve the dispute through judicial channels.

The announcement published in June 5438+February 65438+March 2008 pointed out that after the transaction between Shennan Power and Jierun (Singapore) Private Company (hereinafter referred to as "Jierun Company") was terminated, Jierun Company sent a letter asking the company to compensate for the losses caused by the termination of the transaction, but the company's reply was not adopted. Jierun Company wrote that it hoped to settle the dispute through commercial means, and the company agreed to hold peace talks. At present, the two sides are negotiating and negotiating on matters after the transaction is terminated, but it does not rule out the possibility that the negotiation fails to resolve the dispute through judicial channels.

So far (February 20, 2009), the two sides have failed to reach an agreement or make any substantive progress in the negotiations.

During this period, on June 65438+February 65438+June 6, 2008, shanghai securities news reporter Ying Youjia issued a document, "Termination of gambling agreement, delayed disclosure of insider trading of Shennan power margin?" It is pointed out that Shennan Power delayed the disclosure of information about Jierun Company's cancellation of the gambling agreement, and investors believe that the company's failure to disclose information in time has something to do with the recent fluctuation of the company's stock price. The outside world also believes that there is a suspicion of deliberately depressing the stock price based on this unfavorable news. In this regard, Shennan Electric Power also gave some reasons for its response.

No matter whether the transaction is actually terminated at present, or whether it is terminated but there are differences, and the company's share price is seriously affected based on this matter, the company is suspected of manipulating the share price based on such unfavorable news.

I think the experience and lessons are worth reflecting on.

There are many other situations, only the varieties of derivatives involved are different, but the same principle is to lock in the future price, but at the same time bear the risks brought by the huge price deviation of hedging. The media reported the losses of some enterprises, and we know that some of them have not been reported publicly at all, which may lead to great losses.

The losses in aviation oil hedging business of Air China and China Eastern Airlines, the losses in foreign exchange futures investment of CITIC Pacific, and the earlier copper futures trading of Cao Singapore Company and Jiangtong are often accompanied by the actual financial losses of enterprises, as well as the responsibility of enterprise leaders, the transfer of responsibilities to management and the personnel adjustment of individual executives.

To sum up, for the investment in financial derivatives, we should clearly understand the following points. As latecomers to the market, we need to learn from them, and the lessons are worth reflecting:

First, why can we sign such an unequal gambling agreement? Is there a resolution of the board of directors, a resolution of the shareholders' meeting, the company's internal audit system and decision-making process, and the corporate governance problem is serious? Who should bear the responsibility?

Second, as a listed company in China, where can we see the protection for small and medium investors? If the gambling agreement continues to be fulfilled, the company will face large-scale losses or even bankruptcy. Where can small and medium-sized investors share dividend income besides seeking arbitrage of stock price fluctuation? Of course, as a listed company, Shell also has a market value. In the face of low-cost restructuring, minority shareholders can only wait for the stock price to rise and seek cash.

Third, commercial risk control, the purpose of financial derivatives investment is to lock in a contract to lock in the future price because of the uncertainty of the future raw material price, especially the price increase. However, if the risk of the contract, after evaluation, may be greater than the risk of bearing the high price of raw materials in the current period, it is prudent. In the case of Shennandian, the bet was signed when the international oil price rose sharply. Without such a deal, it is impossible to do it. You can calculate the benefits and risks of the whole contract. If the risks and benefits are equal, it is not impossible to operate. For example, when the oil price falls below $50/barrel, the transaction will automatically terminate, locking the future price range and locking the risk. You can also find other ways to hedge your losses.

Fourth, as far as investment banks providing financial derivatives are concerned, they hope to get arbitrage. Why did they sign such an agreement with Shennan Power? If Goldman Sachs predicts losses, they will not reach a deal, not to mention the option to continue the contract during the period, which increases the possibility of the investment bank winning, because such a gambling agreement is a zero-sum game, which means that either you lose or I win. International investment banks are much better at judging global economic trends and oil prices than an industrial company in China. As a world-class investment bank, they have gathered a large number of contracts. Assuming that half of the contracts are high-priced arbitrage for customers and half of the similar contracts are low-priced arbitrage for customers, then for investment bank intermediaries, risk-free arbitrage of option selling prices can be obtained. For gambling agreements such as Shennandian, it is based on the oil price in the New York Mercantile Exchange. We assume that Goldman Sachs has influence on oil prices, and the cost of its influence is lower than that of all similar gambling contracts, so it will get arbitrage, which will have a positive incentive for Goldman Sachs to influence oil prices in the New York Mercantile Exchange.

Fifth, it is expected that China's financial and capital markets will gradually grow up, so that more financial talents can grow up in China. Without this market, there is no environment for talent growth. Including our stock market and option futures market, we will increase the variety of products in the market and increase the market scale. I hope our government can look at the development of financial and capital markets from a higher level. Mainly to meet the challenge of international financial development, because the pricing power of physical assets, including many industrial security issues in our country, is related to the investment and capital flow of international financial capital and multinational enterprise groups, including their investment and business strategies, as well as competitive pricing factors of products and services.