, Level 1 is cleared, but the problem is still money.

Chapter 366: The first hurdle is over, but the problem is still money.

McMillan stared at Larry for a while before sitting back down in his chair. This young, blond man was truly a surprise to him.

The problem is that the other person's composure and confidence make one really expect that he has wisdom beyond his age.

After a moment's thought, McMillan shifted his position, leaned forward, and asked, "Mr. Livingston, please continue your previous topic. I'd like to know, how can $50 leverage $450 million in grain?"

Larry gently placed the coffee cup on the saucer, making a crisp "ding".

"I'm not buying, Mr. McMillan, I'm borrowing!" Larry calmly stared into the other man's eyes, as if he were communicating with him from the heart.

"This $50 is a risk deposit and my sincerity. I know that Cargill currently has a huge wheat inventory. These precious grains cannot be sold because of their low price—if left any longer, you will probably be swallowed up by those inventories and huge storage costs—"

After hearing Larry's words, McMillan remained noncommittal, but his eyes still held anticipation. Larry continued, "If Cargill pre-sells me 500 million bushels of wheat on a forward spot contract, giving me six months' worth of disposal rights, then I promise that no matter how I dispose of it, Cargill will ultimately receive full payment at no less than 95 cents."

McMillan frowned; such a promise was essentially meaningless. It was as if he had only put up a $50 deposit and was now consigning all his wheat inventory to the market.

That sounds very nice, but what if he can't sell it for 95 cents? This guy named Larry turned around and ran away. So, besides the $50 deposit, who can he turn to?

Of course, McMillan can't just call you a fraud, right?

After all, he wasn't as straightforward as William Gargill.

After a few seconds of thought, McMillan said, "But that's like handing the fate of the inventory to you. If you misjudge—that would be very bad for both of us! Especially for me."

"So, the first step isn't judgment, so there's no such thing as misjudgment." Larry interrupted him with a smile, noticing a hint of surprise in the other's eyes, before continuing, "The moment I gain the right to dispose of the assets, I will immediately sell an equivalent number of futures contracts on the Chicago Mercantile Exchange. The price will be around $1.12 at the current price."

McMillan's eyes flashed suddenly.

Larry knew the other man understood the key point: utilizing the futures delivery system. But Larry still gave him a few more seconds to think before continuing.

"After this step is completed, two things will happen: First, regardless of whether the wheat market price falls to 80 cents or 70 cents in the future."

Financially, Cargill had already locked in a profit of over 95 cents on this shipment through my short futures position. The biggest risk that could have led to Cargill's bankruptcy—not the banks, but the sharp drop in wheat prices—was hedged off at that moment.

McMillan's breathing quickened almost imperceptibly for a moment. The other party bluntly stated that only true industry insiders understood the "imminent crisis," and everyone knew that the strike and railway disruptions were only temporary.

Currently, there are very few orders for wheat exports. Once the wheat harvest is completed in various regions and it enters the market together, the price of wheat will undoubtedly plummet.

When that time comes, the total value of Cargill's collateral will decrease. Then the company will immediately become insolvent.

But if Larry's plan were followed and they sold now from the futures market, it would be a standard, legitimate hedge. It's just that this stranger would be executing it using their goods.

Unlike his father-in-law, McMillan understands futures trading, but clearly the other party has more tricks up his sleeve and will execute this combination of moves even more impressively.

"And the second step?" McMillan pressed, his tone shifting from questioning to inquiry.

"Secondly, I need Cargill to make a gesture!" Larry leaned forward slightly and lowered his voice.

"You need to make the market feel" that Cargill is being forced to "slowly release inventory" due to financial pressure. You don't even need to lie about this; just release some genuine signals of financial stress to guide the market into expecting ample supply and bearish sentiment from major players."

McMillan immediately shook his head. "No, that would reinforce the downtrend! Even if you lock in the price, what good would it do you to lead the market down? And if the market really crashes, your short futures position will certainly make money."

But how can you guarantee how much margin you'll need in the face of huge price fluctuations? If locking in your position fails, the exchange will require you to add margin, or else force liquidation—and then we'll still be exposed to risk!

This is the core trap. McMillan saw the safety of the first step, and instantly saw the danger of the second.

Larry smiled, a smile tinged with approval and a deeper, more calculating quality.

"Before answering that question, Mr. McMillan, we need to clarify something more fundamental," Larry said calmly. "Are you familiar with the Chicago Board of Trade and its leverage rules?"

"Leverage?" McMillan frowned slightly. "I know that buying and selling futures doesn't require full payment, but you do need to pay a margin deposit, depending on the exchange and the broker's requirements."

"That's right!" Larry dipped his finger in cold coffee and wrote two lines of numbers on the shiny walnut wood table.

500 million bushels multiplied by $1.12 equals $560 million.

560 million multiplied by 20% equals 112 million US dollars.

"What is this?" McMillan stared at the numbers.

"This is the initial margin we need to lock up for our short position of 5 million bushels of wheat," Larry said calmly. "Based on the exchange's standard 5x leverage, we need to prepare at least $112 million. Of course, intraday trading will extend to 10x leverage. That would still require $560,000, not including the margin reserves needed to cope with price fluctuations."

McMillan gasped, turning sharply to Larry. "Your $50 in collateral isn't even enough for the most aggressive intraday margin! You're going to use unrealized profits as ammunition—is that even possible?"

"Yes!" Larry readily admitted, "But unrealized gains are credit that can only be used after they are generated. In the very first second of establishing a position, we have to put up real money. This $112 million and the $50 collateral given to your company are two completely separate sums of money."

A brief silence fell over the office. McMillan had finally seen through the surface of this plan, revealing a bottomless financial black hole.

He originally thought that 50 was all the other party's collateral, but now he realizes that it might just be the ticket to the next gamble.

"So, Mr. Livingston," McMillan's voice was hoarse, "your plan has stalled at the very first hurdle. Cargill cannot, and will never, advance this deposit for you. Our working capital is already—"

"I never expected your company to advance the funds," Larry interrupted him, a cryptic smile playing on his lips. "I raised this question precisely to demonstrate to you that I understand the costs and risks at every stage. If I didn't know a $112 million deposit was required, I'd be a fraud, but since I've pointed it out so clearly to you—"

Larry paused here deliberately to make his next words carry more weight.

"—That means I had already made arrangements for it."

After $50, there's still money left to manipulate the market?! This is truly extraordinary.

McMillan's pupils contracted slightly, and he was speechless for a moment.

Larry continued, "This $112 million is my battlefield. And your company's need to cooperate is my tactical cover; we each play our part."

Larry then pointed again to the total value of $560 million in that line of numbers.

"You see, when we talk about how to influence the market, what we're really talking about is how to manage this $560 million expectation. My margin is the key to gaining the qualification to manage it."

After he finished speaking, Larry sat back in his chair, his posture relaxed again, as if the astonishing number had never been mentioned.

"Once you understand everything, I'll go over the details—" Larry said, only after the other person nodded to confirm that he understood. He then explained the small details of how Cargill needed to strengthen the trend.

For example, in next week's routine grain report, a "casual" mention might be made of Cargill's inventory rotation plan at one of its key distribution centers; or, when a middleman inquires about a price, a tentative offer of 5 cents below the quoted price window might be made, and this information might be allowed to circulate within a small circle.

As Larry spoke, McMillan was thinking rapidly.

These operations have extremely low costs and are almost entirely driven by market trends, yet they can greatly reinforce the bearish sentiment in the market.

The key point is that Larry's frankness and preparedness regarding the margin issue made his previously unfathomable sense of control "more real."

This also means that Larry wasn't just making empty promises; he had even factored in the most tedious and expensive details.

However, McMillan still said, "Even if you safely maintain your short position and have a paper profit, if the market eventually crashes, what additional benefit will it bring to Cargill besides locking in the price? Will it save us from our current predicament? Where will your personal profit come from? It seems—not enough to match the price you're asking for, is it?"

Larry knew the time was right. He needed to throw out one last bait, a vague but enticing prospect.

"Mr. McMillan!" Larry's voice was low and leading, "In the futures market, when everyone is running in one direction, what's the most valuable thing?"

McMillan hesitated for a moment, then said, "Is it... a bet in the opposite direction?"

"No!" Larry shook his head. "It's about the physical thing! It's about the only chair you can sit down and rest when the party's over and the music stops. My short positions are for locking in prices and getting ammunition, but my real interest lies in using that ammunition to get something more tangible when the market creates some kind of extreme price structure because of our stance."

Larry paused again to make sure the other person could follow his train of thought.

"You mean—delivery?" McMillan astutely grasped the ultimate stage of futures trading.

This time, however, Larry remained noncommittal, simply smiling.

"All I can say right now is that my plan includes a market correction phase. At that time, Cargill's anticipated inventory release, combined with what I'm about to do, may have a wonderful effect."

The result might not only allow Cargill to escape danger, but also, in an unexpected way, teach some greedy adversaries a profound lesson.

McMillan's eyes hardened again.

Larry leaned back, relaxing. "Of course, that's all in the future. The most crucial thing right now is whether we can reach an agreement on the first and second steps. I'll pledge my funds and immediately open a short position to lock in the price for you. Once this step is completed, Cargill's predicament will be largely resolved."

As for what comes next, we can talk about it after I demonstrate sufficient ability to manage the position and have more ammunition. After all, you hold ultimate ownership of the food and always retain the initiative.

McMillan stared intently at Larry. The young man hadn't revealed the full plan, but his mastery of futures rules, his ruthless calculations of risk management, and his composed demeanor of "everything is under control" were more convincing than any elaborate blueprint.

He proposed a plan to first ensure Cargill's invincibility, while cleverly concealing the tempting spoils behind the fog.

"How exactly do you need us to coordinate our actions?" After a long silence, McMillan finally spoke.

This statement itself already signifies a shift in attitude.

"It's simple!" Larry's smile deepened. "Just listen to me at the right time! I will influence the trading community, and the market will weave its own story."

McMillan picked up his now-cold coffee and drank it all in one gulp. He had finally made up his mind.

"Mr. Livingston, I need to discuss this with my father-in-law. But in principle, we can first draft a specific agreement focusing on 'locking in the price.'"

As he spoke, McMillan stood up, extended his hand, and stared into Larry's eyes.

"As you know, October is a do-or-die month for Cargill. If you can really pull it off, Cargill wouldn't mind bringing in a more forward-thinking partner."

Larry stood up and shook McMillan's hand. "You don't need to worry about that. Your do-or-die game is also a match point where I can make a huge profit. Besides, what I'm after is far more than you think!"

The two men clasped hands, and both could feel the weight of the other as an equal partner.

McMillan believed that this man might actually be able to pull Cargill back from the brink of disaster and, in the process, tear unbelievable profits from the market.

Larry knew that the most dangerous step for him was actually the other $112 million!

Larry had already learned before his arrival that he would only have access to the $50 in the short term. Money in his other accounts might not be transferred to Chicago for at least ten days.

How can I find a way to get something for nothing within these ten days?

This may be the real challenge.

However, we've already overcome this hurdle.

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