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I analyze the 400 million US dollars from the perspective of arbitrage trading
Thaddeus 2021-12-26 08:01:25
The 400 million US dollars is not a shortfall. It should be to fill the short copper futures margin. Because he is short, and the price of copper rises (as explained at the beginning of the film), he will have a loss on the book of his short copper futures position and requires a margin call. If he can hold it, and the Russian copper mine can continue to make a profit, then the sale of spot copper can bring huge cash flow. The result of the copper arbitrage trading in the futures market was that regardless of the rise or fall of the copper price, as long as the spot copper can be shipped normally, it will bring huge profits. It's just that the temporary control of the Russian government has caused a setback in the spot copper transaction. It has also caused problems with his company's cash flow, requiring short-term borrowing from people. However, his ownership of the mining rights to that big copper mine in Russia is also valuable. On the whole, the company is also valuable. It is just a short-term cash flow problem. This is one of the reasons why the next family who took over his company can endure the misappropriation of 400 million U.S. dollars in book funds.
Extended Reading
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Det. Michael Bryer: [interrogating] You stay on the phone for a minute and a half with a wrong number. What the fuck do you talk about? Area codes?
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Syd Felder: What's baffling to me, despite your sentimental history together, is why you would put your family's future in this kid's hands.
Robert Miller: He's not like us.
Syd Felder: Is that a good thing?