Patrick Boyle

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On Monday, over a trillion dollars was wiped off the US stock market due to the appearance of a Chinese artificial intelligence start-up DeepSeek.

The release of a new reasoning model, known as R1, led investors to question US dominance in tech, their expectations around future AI capex while also raising the prospect that China might beat Silicon Valley at its own game.

The new DeepSeek model can “reason” to solve complex problems and performs as well as the AI software from US tech giants like Google and OpenAI, but was apparently developed at a fraction of the price of those models.

DeepSeek quickly overtook OpenAI’s ChatGPT as the most-downloaded free app on the US iOS App store.

Patrick's Books:
Statistics For The Trading Floor: https://amzn.to/3eerLA0
Derivatives For The Trading Floor: https://amzn.to/3cjsyPF
Corporate Finance: https://amzn.to/3fn3rvC

Ways To Support The Channel
Patreon: https://www.patreon.com/PatrickBoyleOnFinance
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Visit our website: https://www.onfinance.org
Follow Patrick on Twitter Here: https://bsky.app/profile/pboyle.bsky.social

Business Inquiries ➡️ [email protected]

Patrick Boyle On Finance Podcast:
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Apple: https://podcasts.apple.com/us/podcast/patrick-boyle-on-finance/id1547740313
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The British government is closing in on a bailout of the Chinese owned British Steel in which taxpayers would inject £600 million pounds into the group.

British Steel is one of only two manufacturers of “virgin steel” in the UK alongside Tata Steel at Port Talbot in Wales which some industry experts claim is strategically important. Tata is in more advanced talks of its own with the government over a similar bailout.

The British government wants the steel mills to switch from using blast furnaces to more environmentally friendly electric arc furnaces at a cost of £1.25 billion to help achieve Britain's net zero goals.

Unions warn that even if the deal is approved, 2,300 jobs would be lost, because EAF is far less labour-intensive than traditional production methods.

Patrick's Books:
Statistics For The Trading Floor: https://amzn.to/3eerLA0
Derivatives For The Trading Floor: https://amzn.to/3cjsyPF
Corporate Finance: https://amzn.to/3fn3rvC

Ways To Support The Channel
Patreon: https://www.patreon.com/PatrickBoyleOnFinance
Buy Me a Coffee: https://www.buymeacoffee.com/patrickboyle

Ed Conway Blog:
https://edconway.substack.com/p/does-it-really-matter-if-we-cant
Material World by Ed Conway: https://amzn.to/3z3LORc

Visit our website: https://www.onfinance.org
Follow Patrick on Twitter Here: https://twitter.com/PatrickEBoyle

Business Inquiries ➡️ [email protected]

Patrick Boyle On Finance Podcast:
Spotify: https://open.spotify.com/show/7uhrWlDvxzy9hLoW0EYf0b
Apple: https://podcasts.apple.com/us/podcast/patrick-boyle-on-finance/id1547740313
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How did SoftBank appear to invest a billion dollars in Wirecard without losing a penny? The trick is that they didn’t put in any money at all. Not only that, but Softbank employees profited from the trade without Softbank itself profiting. WDI.DE

This is a follow up to my earlier video on Wirecard: https://youtu.be/tVBCXSrk8fs

When Warren Buffett invests in a company, that the company’s stock goes up, because other investors mimic Warren Buffett and buy the stock too. This is type of thing is often referred to as a “halo effect.”

In Silicon Valley, SoftBank has its own halo effect, when Softbank puts money into a company, they are known for introducing the company to their other portfolio companies, creating a virtuous cycle that other investors might want to come along for.

What SoftBank appears to have done with their wirecard investment is monetize their halo effect, separate it out from any long term investment returns and simply profit from any pop in valuation from their reputation and stamp of approval from having selected Wirecard.

SoftBank never actually put any money into Wirecard according to Bloomberg. Instead, SoftBank facilitated a $1 billion convertible bond deal for the German digital payments company without investing any cash.
The trade managed to monetize the SoftBank investment halo, but SoftBank itself didn’t make any money off of it. Senior executives at SoftBank profited from this trade along with the government of Abu Dhabi. SoftBank is now trying to distance itself from Wirecard, now that the German payments company has gone bust. They are seeking to terminate their five-year partnership formed with Wirecard in April 2019, according to a Bloomberg article.

If a business is careless with its reputation it can end up losing it.
Let me know in the comments below what you think of this SoftBank trade and of Credit Suisse’s involvement?


Patricks' Books:
Statistics for Traders: https://amzn.to/3eerLA0
Derivatives: https://amzn.to/3kwsPSr
Corporate Finance: https://amzn.to/3fn3rvC

Visit our website: www.onfinance.org
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These classes are all based on the book Trading and Pricing Financial Derivatives, available on Amazon at this link. https://amzn.to/2WIoAL0
Check out our website http://www.onfinance.org/

Follow Patrick on twitter here: https://twitter.com/PatrickEBoyle

Pricing Futures: When the deliverable asset exists in plentiful supply, or may be freely created, then the price of a futures contract is determined via arbitrage arguments. This is typical for stock index futures, treasury bond futures, and futures on physical commodities when they are in supply.

When the deliverable commodity is not in plentiful supply or when it does not yet exist — for example on crops before the harvest or on Eurodollar Futures or Federal funds rate futures (in which the supposed underlying instrument is to be created upon the delivery date) — the futures price cannot be fixed by arbitrage. In this scenario there is only one force setting the price, which is simple supply and demand for the asset in the future, as expressed by supply and demand for the futures contract. See part two of pricing futures for adjustments to the formula that we learn in this video.

Make sure you also watch the video on Convenience Yield being released tomorrow.

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Want to restore the planet's ecosystems and see your impact in monthly videos? The first 500 people to join Planet Wild with my code PATRICK6 will get the first month for free at https://planetwild.com/r/patrickboyle/join

If you want to get to know them better first, check out their latest YouTube video saving lost frogs in Ecuador: https://www.youtube.com/watch?v=z01JHh5Y_Ds

If you want to get to know them better first, check out their latest YouTube video saving lost frogs in Ecuador https://planetwild.com/r/patrickboyle/m16

Demetri Kofinas came up with the term Financial Nihilism in 2019, describing it as a philosophy that treats the objects of speculation as though they are all intrinsically worthless.

Financial nihilism according to Demetri represents an ideological standpoint that questions the value and legitimacy of financial systems, markets, and even the concept of money itself. It doesn’t involve a simple disregard for fundamental reality but a contempt for all fundamentals. The point of view is that the entire system is a scam, and you should thus only view financial markets and prices as a casino.

The rise of meme stocks like GameStop and cryptocurrencies are symptoms of this point of view, where pumping financial products in a zero-sum game has become a style of investing for many of millennials who view it as a way to get rich in an essentially meaningless world.

John Authers argued in Bloomberg that, the latest bout of speculation, and especially the extraordinary excitement at GameStop, unlike prior bubbles has a different emotional driver: anger.

In today's video Patrick explores what got us here and how might this idea affect society.

Demetri Kofinas - Hidden Forces link: https://hiddenforces.io/podcasts/
 
Patrick's Books:
Statistics For The Trading Floor: https://amzn.to/3eerLA0
Derivatives For The Trading Floor: https://amzn.to/3cjsyPF
Corporate Finance: https://amzn.to/3fn3rvC

Ways To Support The Channel
Patreon: https://www.patreon.com/PatrickBoyleOnFinance
Buy Me a Coffee: https://www.buymeacoffee.com/patrickboyle

Visit our website: https://www.onfinance.org
Follow Patrick on Twitter Here: https://twitter.com/PatrickEBoyle

Patrick Boyle On Finance Podcast:
Spotify: https://open.spotify.com/show/7uhrWlDvxzy9hLoW0EYf0b
Apple: https://podcasts.apple.com/us/podcast/patrick-boyle-on-finance/id1547740313
Google Podcasts: https://tinyurl.com/62862nve

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From skyscrapers in the middle of nowhere, to man-made islands that are sinking into the sea. And from abandoned buildings to foolish transportation infrastructure - let's look at the world's most useless megaprojects.

Patrick's Books:
Statistics For The Trading Floor: https://amzn.to/3eerLA0
Derivatives For The Trading Floor: https://amzn.to/3cjsyPF
Corporate Finance: https://amzn.to/3fn3rvC

Ways To Support The Channel
Patreon: https://www.patreon.com/PatrickBoyleOnFinance
Buy Me a Coffee: https://www.buymeacoffee.com/patrickboyle

Visit our website: https://www.onfinance.org
Follow Patrick on Twitter Here: https://bsky.app/profile/pboyle.bsky.social

Business Inquiries ➡️ [email protected]

Patrick Boyle On Finance Podcast:
Spotify: https://open.spotify.com/show/7uhrWlDvxzy9hLoW0EYf0b
Apple: https://podcasts.apple.com/us/podcast/patrick-boyle-on-finance/id1547740313
Google Podcasts: https://tinyurl.com/62862nve

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Todays video is all about the Wirecard Scandal. Wirecard a German payments company announced that they are filing for insolvency this morning. We will learn what happened at Wirecard, what Wirecard does, and how they became the new Enron. Why did Wirecard go bust? WDI.DE

Watch my follow up video here on how SoftBank appeared to invest $1 billion in Wirecard without losing a penny: https://youtu.be/J70Ryj9-EMQ

Dan McCrum, at the Financial Times, has been reporting that German fintech company Wirecard was faking some of its revenue, and Wirecard has been angrily fighting back, accusing McCrum of conspiring with short sellers to push down its stock.

Last week Wirecard disclosed that some of its cash was missing, and finally this week admitted “that there is a prevailing likelihood that the bank trust account balances in the amount of 1.9 billion EUR do not exist.”

So what is Wirecard? It is a firm launched in the late stages of the dotcom boom in 1999 as a payment processor, helping websites collect credit card payments from customers. They almost went bust and in 2002 Markus Braun, a former KPMG consultant, took over as chief executive.

In March this year, Wirecards auditor was unable to conclude the audit. In April their accounting firm said that they could not verify that arrangements responsible for “the lion’s share” of Wirecard profits reported from 2016 to 2018 were genuine. On June 18th Wirecard announced that 1.9 billion euros was missing and the next day Markus Braun the CEO Resigned.

On June 22nd Wirecard acknowledged that the €1.9bn of cash probably does “not exist”. The next day Markus Braun was arrested and today Wirecard announced that they would file for insolvency.

Freelancers around the world are unable to access their money from their prepaid Payoneer card thanks to a recent Wirecard scandal.

The German audit watchdog has told prosecutors on November 26th that EY may have acted criminally during its work for Wirecard, a step that significantly escalates the legal and reputational risks for the accounting firm.

According to the Financial Times, Apas, the independent government body overseeing Germany’s auditing industry, had sent a report to prosecutors. This is the first time a government agency has said EY may have broken the law during its audits of the German payments group.

Patricks' Books: https://amzn.to/3i6dxDl
Visit our website: www.onfinance.org
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These classes are all based on the book Trading and Pricing Financial Derivatives, available on Amazon at this link. https://amzn.to/2WIoAL0
Check out our website http://www.onfinance.org/

Follow Patrick on twitter here: https://twitter.com/PatrickEBoyle

What are Financial Options?
Options are a financial derivative sold by an option writer or seller to an option buyer. They are typically purchased through a broker. The contract gives the buyer the right, but not the obligation, to buy (call option) or sell (put option) the underlying asset at an agreed-upon price during a certain period of time or on a specific date. The agreed upon price is called the strike price. American options can be exercised any time before the expiration date of the option, while European options can only be exercised on the expiration date (also known as exercise date). Exercising an option means utilizing the right to buy or the sell the underlying security.

What is a call option?
Call options provide the option buyer with the right to buy an underlying security at the strike price. The buyer of a call option is bullish and wants the price of the stock to go up. Conversely, the option seller (or writer) has to sell the underlying security to the option buyer, at the strike price, in the event that the stock's market price is above the strike price at expiration.

An option writer who sells a call option believes that the underlying stock's price will drop or stay the same relative to the option's strike price during the life of the option, as that is how they will reap maximum profit. The writer's maximum profit is the premium received when selling the option.

If the buyer is right, and the stock rises above the strike price, the buyer will be able to acquire the stock for a lower price (strike price) and then sell it for a profit at the current market price. However, if the underlying stock is not above the strike price on the expiration date, the option buyer loses the premium paid for the call option.


What is a put option?
Put options give the option buyer the right but not the obligation to sell the underlying at the strike price. The put buyer is bearish and wants the stock to go down. The opposite is true for a put option writer who writes a put option believing that the underlying stock's price will stay the same or increase over the life of the option.

If the underlying stock's price closes above the specified strike price on the expiration date, the put option writer's maximum profit is achieved. They get to keep the entire premium.

Conversely, a put option buyer benefits from a fall in the underlying stock's price below the strike price. If the underlying stock's price falls below the strike price, the put option writer is obliged to purchase shares of the underlying stock at the strike price. The put option buyer's profit, if applicable, is calculated by taking the Strike Price – (Current market price + Premium paid). This is then multiplied by 100 (if each contract is 100 shares) and the number of contracts bought.

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Millionaires are leaving the UK faster than any country in the world other than China, new data shows.

According to the Henley Private Wealth Migration Report, 9,500 millionaires, defined in US dollar terms are leaving the UK this year. Only China - which has more than twice as many people with seven-figure net worths - saw more millionaires leave.

This is a new record outflow for the UK, with London expected to be especially hard hit. The top destinations for millionaires leaving the UK include Paris, Dubai, Amsterdam, Monaco, Geneva, Sydney, and Singapore, as well as retirement hotspots such as Florida, the Algarve, Malta, and the Italian Riviera.”

Patrick's Books:
Statistics For The Trading Floor: https://amzn.to/3eerLA0
Derivatives For The Trading Floor: https://amzn.to/3cjsyPF
Corporate Finance: https://amzn.to/3fn3rvC

Ways To Support The Channel
Patreon: https://www.patreon.com/PatrickBoyleOnFinance
Buy Me a Coffee: https://www.buymeacoffee.com/patrickboyle

Visit our website: https://www.onfinance.org
Follow Patrick on Twitter Here: https://twitter.com/PatrickEBoyle

Patrick Boyle On Finance Podcast:
Spotify: https://open.spotify.com/show/7uhrWlDvxzy9hLoW0EYf0b
Apple: https://podcasts.apple.com/us/podcast/patrick-boyle-on-finance/id1547740313
Google Podcasts: https://tinyurl.com/62862nve

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South Korea has the best performing stock market in the world for the second year running — and it's also in the middle of one of the worst bear markets on earth. The KOSPI is down around 27% from its June peak, more than 1.2 million retail accounts have been hit with margin calls, and hundreds of thousands of Korean investors have been wiped out entirely. But this isn't a story about meme stocks or worthless companies. Samsung Electronics and SK Hynix are enormously profitable businesses at the center of the global AI boom, and the traders buying them were right about the trend. In this video I look at how a national stock index became a two-stock bet on artificial intelligence, how single-stock leveraged ETFs turned ordinary volatility into a mechanical feedback loop, why Korea's retail "ants" took on so much leverage in the first place, and what Victor Haghani's famous biased-coin experiment tells us about how you can be completely right about a market and still lose everything.

Patrick's Books:
Statistics For The Trading Floor: https://amzn.to/3eerLA0
Derivatives For The Trading Floor: https://amzn.to/3cjsyPF
Corporate Finance: https://amzn.to/3fn3rvC

Ways To Support The Channel
Patreon: https://www.patreon.com/PatrickBoyleOnFinance
Buy Me a Coffee: https://www.buymeacoffee.com/patrickboyle

Visit our website: https://www.onfinance.org
Follow Patrick on Twitter Here: https://bsky.app/profile/pboyle.bsky.social

Business Inquiries ➡️ [email protected]

Patrick Boyle On Finance Podcast:
Spotify: https://open.spotify.com/show/7uhrWlDvxzy9hLoW0EYf0b
Apple: https://podcasts.apple.com/us/podcast/patrick-boyle-on-finance/id1547740313
Google Podcasts: https://tinyurl.com/62862nve

Join this channel to support making this content:
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