Chapter 166 Is there anyone else involved in the stock market?
Sun Dahai was shorting several Britten public utility stocks on the Xiangjiang stock market. These stocks have common characteristics. They are leading stocks in their respective industries. They have large market sizes and are closely related to the development of Xiangjiang.
It is precisely this characteristic that allows Sun Dahai to sell short ten times without being noticed.
In addition, the setback in negotiations between Britten and China on the Hong Kong issue also caused a huge negative impact on these stocks. Coupled with the fueling of the market by well-intentioned people, they led the decline in the market.
However, everything is too much.
The real negative impact is long-term risk for these listed companies, but they can reduce losses and reduce the negative impact on themselves through other means.
The impact of the negotiations between the two parties is more on confidence than actual company performance. Even if China takes back the sovereignty of Xiangjiang, the operators of these public utilities will be compensated in various aspects.
Seek a smooth transition.
Therefore, Sun Dahai judged that there was no problem for them to lead the market down, otherwise Sun Dahai would not have specifically shorted them. But the current rate of decline is a bit too fast and too violent.
Therefore, according to his plan, when the stock market opened on Monday and continued to trend downward, the trading team cleared all positions in the Xiangjiang stock market and bought the stocks that had been shorted in advance at an average price of 11.2% lower than the short selling price, completing a complete transaction.
trade.
Let me explain here that shorting futures means placing a short order directly, which corresponds to a long order. Investors buy a short order, which means they promise to sell the futures underlying to the exchange at the agreed price and quantity upon expiration.
.The opposite is true for long orders.
However, ordinary investors cannot carry out physical delivery. They must take the initiative to close their positions before the last trading day of the contract. If not, their positions will be automatically matched and closed after the close of the last trading day based on the average price of the last trading day.
One of the characteristics of futures trading is that "there must be short positions when there are long positions, and the long positions and short positions must be equal."
To short a stock, you borrow it first and then pay it back.
Investors and brokers agree on the time, quantity and interest rate, borrow a certain number of stocks from the brokers, sell them on the market, and then buy the same number of stocks from the market before the specified repayment time, and return them to the investor on time.
brokerage and pay interest.
…
What Sun Dahai didn't know was that at this time, in a mansion in the middle of Xiangjiang, several old people were also discussing these stocks.
These old people are the masters of the major Chinese families in Xiangjiang. No matter who stamps their feet, Xiangjiang will shake with them.
What they were talking about together must be a big deal.
"Old Zheng, this Xiao Liu you are looking for cannot operate like this. His method is too simple and hard. Anyone who knows a little bit about stocks can see his purpose. Does he have any experience in collecting chips like this?
?”
A tall old man was a little unhappy and he was questioning another old man.
"It's my fault, I haven't paid much attention to the stock market in the past two years. I heard from people at the securities company that this Xiao Liu is now the number one trader in the stock market. He is very famous and has done many wonderful cases. That's why I found him this time.
Come to trade, who knew he would be so reckless." The old man surnamed Zheng said helplessly.
"Old Zheng, please change someone." Another person also spoke: "I found someone to collect some information about him in the past. This Xiao Liu is mainly engaged in speculation, especially in small-cap stocks and junk stocks. He trades
His characteristic is that he is cruel in his methods and hurts people with his own intentions. But he is really not suitable to accomplish our purpose this time."
"I agree."
"agree."
…
"Sure, I agree to replace him. Anyway, it's just the beginning and it's not too late. But, who will be in charge?" asked the old man surnamed Zheng.
"Let me recommend a person. Cao Renchao, a financial columnist of Hong Kong Economic and Trade Co., Ltd. My son likes his articles very much. After getting to know him, he also admired his investment ideas and invited him to join his trading team several times.
He didn't want to be bound, so he didn't accept my son's invitation, but he promised to cooperate if there was an opportunity."
"Lao Li, your son has always had good taste, so let's use him?"
"I think it's okay, but we have to make it clear to him first. Our purpose is not to make money, but to acquire more shares of these companies, but the prerequisite must be kept confidential so as not to attract the other party's attention, so as to prepare for future acquisitions.
Get ready." Another old man said.
"Lao Bao also agrees, so let's make it this way. As for Xiao Liu, can Lao Huo make arrangements?"
"No problem. Didn't we all agree before asking him to do business? A big red envelope, plus a hush money that cannot be leaked for three years. I have already arranged for two people to be his full-time bodyguards for the next three years. First.
Let him go to Thailand and take the first half of the year off."
"Okay, let's do it according to Lao Huo's method. But Lao Li, I think we should be more cautious. These are all well-established Britten companies. Be careful that they have white knights secretly protecting them. They might even force the acquisition."
Sometimes, if a white knight pops up, it will be troublesome."
"If that doesn't work, register a few more vest companies to distract your attention."
…
After Sun Dahai took action, he found that the trend of those stocks was much more normal and began to rebound from oversold conditions. So a few trading days later, when those stocks rebounded immeasurably and were blocked by the early gap, Sun Dahai ordered to continue to do so.
Ten times leverage, short position with full position.
Now, the principal available to the trading team is not one million Hong Kong dollars.
The previous transaction was one million Hong Kong dollars, short selling with ten times leverage, that is, the trading team borrowed and sold 10 million stocks, bought them back and returned them at an average price drop of 11.2%.
Brokerage dealer.
From the entire transaction, after deducting transaction fees, leverage fees and interest on borrowing stocks, the actual profit reached a little more than one million.
The handling fees for stock trading are not much, but the fees for using financial leverage and the interest on borrowing stocks are quite a lot. This is a high-risk method in the stock market, in order to make a big difference with a small amount.
If investors look in the right direction and grasp the timing of entry and exit, their profits will be huge, but if they look in the wrong direction, they will die miserably.
Even if the direction is right, if investors do not grasp the timing of entry and exit, returns will drop a lot, and stock returns are sometimes not even enough to cover costs.
Sun Dahai grasped the situation very well this time, went smoothly, and easily doubled the principal. Now, the trading team's principal in the Hong Kong stock market is already 2 million Hong Kong dollars.
Following Sun Dahai's order, stocks worth 20 million began to be sold in batches.
Since the number of shares to be sold was doubled this time, and there was less recklessness on the part of one speculator, the sale was not as easy as the last time.
Fortunately, the trading team cooperated with several transactions and split the sell orders tacitly, and used multiple accounts to buy and sell separately. It took two trading days to complete this transaction.