Single chapter Ask about it

Author: Underwater Wild Fish

Single chapter Ask about it

Some people think that the futures returns in the previous chapter are wrong.

In fact, I have never actually played this. According to the information I checked, short selling is to buy stocks (foreign exchange, etc.) and then sell them first, wait for the target asset to depreciate, and then buy it back to earn the difference.

Going long means borrowing funds to buy assets first, and then selling them for profit after the assets appreciate in value. The higher the leverage, the higher the profit.

Taking the protagonist as an example, the long position is to use 1 billion U.S. dollars as collateral, borrow 5 billion U.S. dollars from multiple investment banks, and then purchase virtual gold. The virtual gold is monitored by multiple investment banks. The virtual gold will be sold after the gold has tripled in value. The total value is 15 billion.

Then don’t we have to pay back another 5 billion to the investment bank?

If gold falls in the future, do you have to borrow gold and sell it, and then wait for the price of gold to drop before buying it back and returning it to the borrower?

Without this borrowing process, how can this futures transaction be completed? I sincerely ask for advice. This is my understanding of futures.

If it doesn't work like this, how does it work? How do you directly own the equity of 5 billion US dollars in gold?
Chapter completed!