Chinanews.com Client, March 19 (Peng Jingru) "Recently, the prices of commodities such as precious metals in the international market have fluctuated sharply. During the daily monitoring of the account's commodity business, the Bank found that individual customers had conducted large amounts of abnormal transactions many times, and It has obvious regional and organizational characteristics. "On March 18, a notice issued by ICBC aroused market attention.
Later, it was reported that some of the bank's commodity business was unable to complete multiple orders. After the commodity prices plummeted, the bulls couldn't sit still and wanted to fight back? Can organized large abnormal transactions by bank customers affect international commodity prices? What are the risks to banks?
US WTI crude oil futures price chart.
Crude oil and gold prices plunge, some investors sell out
Recently, affected by multiple factors such as the global epidemic and geopolitics, the risk aversion in the market has risen, and the prices of commodities such as precious metals and crude oil in the international market have plummeted.
On the 18th, the United States WTI crude oil futures closed down 16.25% to 22.89 US dollars / barrel, a record low in nearly 18 years, and once fell sharply by 25% during the session, down nearly 20 US dollars / barrel. Brent crude futures closed down 7% at $ 28.2 per barrel, the lowest since May 2003.
At this point, the international crude oil futures price has dropped from an annual high of more than 60 US dollars / barrel in January to more than 20 US dollars / barrel. During this period, the largest daily drop in history occurred on March 9th. Affected by Saudi Arabia ’s oil price war, the day ’s intraday oil price fell by more than 30%, and the oil price was directly smashed from more than $ 40 / barrel to about $ 30 / barrel.
As of the 18th, the March WTI and Brent crude oil futures prices have fallen by more than 44% in March. Goldman Sachs lowered its expectations for international oil prices in the second quarter, arguing that US WTI and Brent crude oil futures prices will fall to an average of $ 20 per barrel.
Han Xiaoping, chief information officer of China Energy Network, told reporters that "behind the plunge in crude oil prices is that some investors are stopping losses because oil prices are difficult to continue to short at such low times, especially for oil that is about to be delivered, without dumping him (Clear) There is no other way. "
"Recently, the collapse of crude oil led by commodities has increased deflation expectations, leading to indiscriminate selling in the market," said Li Yunxu, a senior researcher at SDIC Anxin Futures Research Institute. "The volatility of gold has also increased significantly. The huge volatility has made it extremely difficult for investors to trade. Increase, or even a liquidation situation. "
The reporter noticed that on March 9th, when U.S. stocks and crude oil plummeted, the London gold spot once broke through $ 1,700 per ounce, setting a new high of nearly seven years, but then continued to fall. It has now fallen below $ 1,500 per ounce, down more than 11%. . The London silver spot has plummeted by nearly 30% since March.
London gold spot price chart.
Large abnormal transactions by banks 'commodity customers' existing organizations
"Recently, the prices of commodities such as precious metals in the international market have fluctuated violently. In the daily monitoring of our account's commodity business, our bank found that individual customers have conducted large amounts of abnormal transactions many times, and that they have obvious regional and organizational characteristics." March 18, ICBC issued the "Notice on Regulating the Trading Behavior of Customers in the Commodity Business of Accounts" as stated.
Subsequently, media reports said that on Monday, multiple orders for North American crude oil and international crude oil in the ICBC account energy could not be traded, prompting that "the purchase of products has reached the limit of the net amount of our bank account products and aggregated transactions outside the account. Opening a position (longing) will not affect the closing of the position; after the total net amount of the transaction returns to within the limit, you will be able to re-buy a new position. "According to media reports, other banks have similar situations.
Why is this happening? Li Yunxu told reporters that banks generally set trading limits on crude oil products in their accounts. After the recent crude oil plunge, the bottom-off sentiment is strong, causing the total net transaction amount to reach the upper limit set by the bank, and long orders cannot be traded.
Taking Industrial and Commercial Bank of China as an example, it stipulates that "ICBC sets an upper and lower limit on the total net transaction amount of crude oil in the RMB trading account. The total net transaction amount refers to the amount of crude oil in all accounts held by all customers who handle crude oil in the RMB trading account. Negative position after rolling difference. "
Why do banks set transaction limits? It is understood that crude oil products launched by banks and other third-party platforms are investors indirectly participating in crude oil futures trading.
Li Yunxu said that because bank account energy products are equivalent to setting up an independent trading market that is only open to their customers, banks need to hedge against the international crude oil futures market for the risk exposure caused by different short and long positions. If the risk exposure (financial risk in financial activities) is too large, banks will bear more risks from extreme market conditions and capital occupation.
Industrial and Commercial Bank of China's Notice on Regulating the Trading Behavior of Account Customers
What risks does large abnormal transactions pose to banks?
Li Yunxu analyzed, "A large amount of abnormal transactions does have certain risks to the operation of crude oil in the bank account, mainly due to the fact that when the single transaction is too large, the actual transaction price may be slightly deviated from the transaction price of the bank to the futures market passive hedging. "
"If there are frequent large-scale abnormal transactions with obvious regional and organizational characteristics, this move will make it extremely difficult for banks to hedge their exposure to risks and may cause banks to make losses." Li Yunxu added, "So , This is an act prohibited by banks. "
In the above notice, ICBC stated, "This abnormal transaction has adversely affected the operation of our business system and other customers' transactions. For customers who conduct abnormal transactions, our bank will terminate the agreement in accordance with the agreement signed with the customer. Relevant measures such as account commodity trading services, and reserves the right to take further legal measures. "
The reporter noticed that due to the intensified fluctuations in commodity prices, ICBC also issued on the 18th the "Notice on Changes in the Spread of Commodity Trading Accounts of the Bank".
The notice stated that according to international market practices and relevant provisions of the Industrial and Commercial Bank of China account precious metal, account energy and other account commodity transaction agreement, and reference to international market quotations and market liquidity conditions, the account commodity transaction spread will be flexibly adjusted: market volatility has increased, and liquidity is insufficient When the market fluctuation stabilizes and liquidity recovers, the spread will be narrowed. The specific adjustments are subject to the actual quotations of various channels of ICBC, and no further announcement will be made at that time.
According to the reporter's understanding, unlike the commissions charged by brokers in the futures market, the platform income of crude oil in bank accounts comes from spreads (the fees charged by dealers, the wider the spread, the higher the fees). In addition, the actual spread of paper gold for each bank is derived from the difference between the buying price and the selling price of the bank according to the median price. Generally, the spread is set by the banks themselves, different from bank to bank, and from region to region.
"Under the current large fluctuations in the prices of commodities such as precious metals, banks can increase investor transaction costs by widening spreads, which can reduce investment heat, avoid frequent transactions, and reduce risks." Li Yunxu said.
Data map.
Do large amounts of abnormal transactions by bank customers have a significant impact on commodity prices?
"Whether bank clients' organized large-scale abnormal transactions involve manipulation of the market depends on factors such as trading exposure and scale, and whether they cause violent market fluctuations." Li Yunxu said.
Han Zhengji, an analyst of Jinlianchuang crude oil, said that from the current point of view, the impact on the prices of precious metals, crude oil and other international commodities may be small. "Because of the Saudi crude oil price war and the impact of the epidemic on the economy, oil prices can be said to have bottomed out. Moreover, domestic investors have relatively few holdings of international crude oil futures, and it is difficult to have a large impact on international oil price trends."
"Professional investors in commodity trading are mainly concentrated in direct futures trading and fund markets. Banking channels are mainly small-scale retail customers." Li Yunxu also believes that "the so-called large-scale abnormal transactions only come from banks' own trading platforms. The definition is not related to the commodity futures market. The international crude oil futures market with crude oil in the bank account is active and liquid, and it is less likely to be manipulated by the price of its crude oil hedge position. "(End)