Chapter 68

Elena kept feeding him one bite at a time, and before either of them realized it, Richard had eaten more than half of the generous breakfast.

When she lifted another small piece of toast dipped in egg toward him, however, Richard didn’t open his mouth.

Instead, one arm suddenly circled her waist.

“!”

Elena barely had time to react before he pulled her toward him, and a second later she found herself sitting securely on his lap.

Before she could say anything, Richard took the fork from her hand, turned it around, and held the toast to her lips instead.

“Mmph…”

Elena instinctively took the bite. Butter and egg filled her mouth as she chewed, but she was far more conscious of the arm around her waist and the warmth of his body against hers.

Her cheeks slowly turned pink.

“What are you doing? Aren’t you supposed to be working?”

Richard shifted slightly so she could sit more comfortably, then rested his chin near her shoulder. After staying awake all night, there was a rare laziness in his voice.

“I’ve just shown Frankfurt how far I’m willing to go. Now I’m waiting for their executive directors to respond.”

At that, Elena glanced toward the curved monitors.

Charts, numbers, and streams of financial data flashed across the screens, most of them completely incomprehensible to her.

She stared for a couple of seconds before suddenly turning away.

“Wait. Is there confidential information on those screens? Am I not supposed to look?”

Richard raised an eyebrow and put on a serious expression.

“Yes. All of it is highly confidential. If you see it, you’ll have to—”

Elena looked at him suspiciously.

Richard tightened his arm around her waist and leaned closer to her ear.

“Marry me.”

Elena stared at him.

“…”

Richard laughed behind her, and she could feel the vibration of it against her back.

He casually ran a hand over her hair.

“There’s nothing here you can’t see.” He paused. “Although…”

Elena glanced at him.

You could be reading stolen content. Head to NovelPhoenix for the genuine story.

“Can you understand any of it?”

“No.” She gave him a sideways look. “I didn’t understand any of your secrets, so you don’t get a wife.”

Richard chuckled.

He took her hand and turned her attention back toward the monitors.

“Do you want to understand?”

Elena nodded immediately.

Richard swiped across the trackpad and brought one of the charts onto the main screen.

His voice settled back into its usual calm tone, though there was considerably more patience in it now.

“Look at this one. These are European carbon-allowance futures. In simple terms, companies covered by the system need allowances for their emissions. One allowance generally represents the right to emit one metric ton of carbon dioxide.”

Elena considered that.

“So companies buy and sell these allowances, and that helps limit how much they can emit?”

“Essentially. But there’s more to it.” Richard pointed toward the chart. “The total number of allowances available is reduced over time. If a company doesn’t have enough, it either has to buy more on the market or reduce its emissions. That turns environmental pressure into an actual business cost.”

Elena nodded again.

“So this chart is basically showing people trading those allowances.”

“The futures contracts tied to them, yes. And changes in price reflect what the market expects those emissions to cost in the future.”

His finger moved along the chart.

“Now look here.”

He stopped at a sharp decline.

“Once reports began circulating that a regulatory adjustment could be delayed because of internal disagreements, the market reacted. The important part isn’t the report itself. It’s the uncertainty it created.”

Richard switched to another display. A series of horizontal bars appeared.

“These show net capital flows over different time intervals. The larger the outflow, the more aggressively money is leaving that part of the market.”

Elena followed his explanation closely.

“There are two other concepts you should understand: leverage and hedging.”

He pulled up another diagram.

“Leverage means using a relatively small amount of capital to control a much larger position. It magnifies your potential return, but it also magnifies your losses. Hedging is different. You take another position designed to offset some of the risk in your main exposure.”

Richard explained a little more before moving on.

“Options are another layer. An option gives its holder the right, under specified terms, to buy or sell an underlying asset at an agreed price.”

He paused long enough to let her process it.

“As expiration approaches, a sharp move in the underlying market can leave dealers and leveraged traders badly exposed. They may be forced to hedge, unwind positions, or post additional collateral. When enough of them are doing that at the same time, it can amplify the volatility.”

Elena listened intently, her gaze moving between the charts as she tried to connect everything he had just explained.

Then she suddenly pointed toward a section in the upper-right corner of the screen.

“I think I’m starting to understand.”

Richard waited.

“If regulators stay quiet today—no clarification, no intervention—and everyone keeps panicking…”

Her finger followed one of the moving averages downward until it reached a previous support level.

“If the price breaks below this level, could that force some people to… um…”

She searched for the right words.

“Sell whether they want to or not?”

Richard’s eyes shifted from the chart to her.

Elena frowned at the screen, trying to piece together what he had just taught her.

“And then it starts feeding on itself? Especially if they’re using a lot of leverage. Their collateral loses value, they get margin calls, and then they have to sell even more just to cover them?”

Richard nodded.

“Exactly. Forced liquidations can drain liquidity very quickly. Companies or funds carrying large leveraged positions can suddenly face serious funding pressure when the market moves against them.”

Elena nodded vigorously.

A faint smile of approval appeared on Richard’s face.

“That’s one of the things you need to remember about financial markets. The danger isn’t always the direction of the market itself. Sometimes it’s the leverage underneath it that only becomes visible when the direction suddenly changes.”

He turned his head and planted a firm kiss on her cheek.

Elena blinked.

Richard smiled.

“You learn quickly, Ellie.”

His arm remained comfortably around her waist as he turned back toward the screens.

“I’ll teach you the rest little by little.”