Chapter 182 I Know You Are in a Hurry
The profit from arbitrage is actually not very high. Li Yuan and his team sold the chips at around two points, and the shares were taken over at five or six points underwater.
Not many were sold, and not many orders were taken.
In about two hours, I probably earned about 10 million US dollars.
As Li Yuan took on more and more projects, the funds seemed to be unsustainable. They would give Li Yuan whatever he asked for.
However, Li Yuan ended up only taking $500 million in chips and never took any more.
If you eat more, you will get yourself into trouble.
Five hundred million US dollars, on average, only about 20 to 30 million US dollars per ticket. This amount of money is not enough for the institutions in those tickets to get out of the predicament.
If they continue to take over the chips, those institutions might just let Li Yuan take over, and the result would be...
Of course, Li Yuan didn’t have that much money to take over.
Currently, Li Yuan holds long positions worth US$1.4 billion, and has more than US$300 million in reserve.
Plus more than $400 million in leveraged short positions.
Seeing that the other party did not respond, Li Yuan decisively gave orders.
"Continue to open short orders at this position. Follow the previous process and open the first round of short contracts today."
The pain point for Wall Street is facing the problem of investors withdrawing their funds. They must make the data look better, or at the very least, they cannot incur too big a loss.
If Li Yuan is willing to take over the entire business, they can cash out. Even if it is at a 20-point discount, it would be worth it for them to get cash.
Because the bubble in their own funds is more than twenty points.
If someone pushes up the price, they can accept it.
What I fear most is that I cannot get my funds out and the stock price is still falling.
If Li Yuan could come up with an extra $500 million today, some institution might give him all its chips.
They really don't want to gamble with others now. Yesterday's action was just an attempt, and each company invested a few million dollars to test the waters.
There are hundreds of institutions associated with these stocks, and each institution has millions of dollars, which is not a small amount when added up. However, for a single institution, it is not a big investment.
As Li Yuan opened a short position, they were completely stunned.
It was a consensus yesterday that the new guy is not easy to deal with, but that’s enough. Why do you have to chase and bite him?
They watched the stock price drop by several points, but they didn't want to enter the market because they felt the financial situation was not looking good.
Come in, you don’t know when it will end.
From yesterday's test, it was clear that the other party was determined to pull the lever, and it would be useless unless we could blow them up in one breath.
Because the other party does not have many chips, they have greater flexibility.
They even realized that the other party might have hedged and was very bold, so it would be even more difficult to pull it out.
Seeing that the stock price was about to drop by ten points, they were extremely conflicted.
But this is far from the end, it's just the beginning.
At two o'clock in the morning, Li Yuan saw that those people were not moving, so he decisively opened a second round of short contracts.
This time the damage was more thorough because the follow-up capacity was weaker.
Two or three hundred million dollars were spent on each stock, but in the end no one took the offer.
Directly broke through the bottom line of twenty points.
At this time, as long as the price is pulled from 20 points underwater to 2 points above water, all of Li Yuan’s short positions will be liquidated at this time.
The less the enemy moves, the greater the chance Li Yuan feels.
"Open a long contract with the same six-fold leverage."
Li Yuan issued another order.
There were twenty points of chips underwater, and since no one took them, he took them himself.
It is equivalent to holding the brokerage firm's chips in your own hands. Although you don't make any money, you may even lose money in handling fees.
He only takes over about twenty points underwater and does not want any chips at other positions.
On Wall Street, many institutions couldn't eat at noon, and the cigar cabinets that they usually used for celebrations now gave them a headache.
Twenty points is definitely the bottom line for Wall Street institutions.
What will the investors see tomorrow? My goodness, you guys have made me lose more than ten points in one night?
Redeem! Redeem!
My dog is not as good at managing the funds as you are at managing them.
So after breaking through the level of twenty points underwater, those people and institutions on Wall Street could no longer sit still.
Although they are all small organizations, hundreds of such organizations go bankrupt every year in the United States, but they cannot be bullied like this...
They don't have much money, but that doesn't mean they have no money.
How did the name capitalist country come about?
After all, they are considered small capitalists and the masters of this place.
They don't know who is causing trouble this time, whether it is a foreign organization or a domestic counterpart, but they have been bullied to their face and they will not keep enduring it.
For those who play with capital, every penny earned is stained with blood.
After trying it before, I felt it was not worth it, but now...
As more and more phone calls began to ring, around 3:30, the entire market began a major counterattack.
…
When Li Yuan saw funds entering the market and starting to push up the price violently, he knew that the other party could no longer hold back.
At the same time, he opened long contracts worth less than 1 billion US dollars, 50% of which were his own, and the other 50% were scattered chips sucked from the market.
The current situation is that there are $2.4 billion in long positions, of which $1 billion are leveraged contracts.
Holding short positions worth $1 billion, all of which are leveraged contracts.
The remaining funds were only 180 million US dollars.
When the stock price began to rise, Li Yuan immediately issued an order: "The remaining 180 million US dollars are at the surface, open short orders for all of them!"
He is not allowed to blow up his position.
As long as he can continue to open short orders of 180 million US dollars at that position, after accumulating leverage, it will be a short order of more than 1 billion US dollars, which is enough to pull his own liquidation line up by about eight points.
In that case, the stock price would have to rise by ten points before your position would be liquidated.
From twenty points underwater to ten points above water, a total of thirty-two points are waiting for them.
Perhaps it is not that difficult for them to push up the market overall.
But if each company doesn't contribute 10 or 20 million US dollars, it will definitely not be able to scale up.
If you can come up with 10 or 20 million US dollars, then coming up with 100 or 200 million US dollars should not be a problem, right?
Can’t take it out?
oh……
Wall Street's counterattack was surprisingly unanimous.
When Li Yuan saw it, he laughed.
This shows that the information behind them is completely shared. Even if not all of it is shared, it is at least shared between two people.
And those people also realized that their opponents were the same.
But they don't have the authority to check Li Yuan's background.
Moreover, no foreign funds have ever specifically targeted them, so they subconsciously believe that some big capital in the United States wants to suck their blood.
This is the law of the jungle, and all financial markets around the world must abide by this rule.
Either resist or watch others cut your flesh.
McPherson is a small figure on Wall Street. His company manages only $1 billion, and this $1 billion was created by increasing bubbles over the years.
In fact, if one must sell off all the stocks held, even $500 million cannot be converted into cash.
The amount of money he had to pay to investors at this time was US$700 million.
This is a game of passing the parcel. As long as investors continue to come in and previous investors do not withdraw all at once, he can maintain the bubble and maintain the scale of his company's annual profit of tens of millions of dollars.
But if a run occurs, his company will go bankrupt.
There is no financial company that does not use leverage, and it is impossible to de-bubble in the securities industry.
Bubbles are profit points, but they can also kill people.
The bigger the bubble, the more money you make.
Similarly, the bigger the bubble, the more desperate the death will be when it takes someone's life.
Now he is facing a situation. If he allows the other party to suppress him, his bubble will be burst and the company will definitely go bankrupt. After a run on the bank, even if he can apply for bankruptcy protection, he will become a poor man from a billionaire. This is a situation he cannot accept.
In the beautiful country, it is impossible for the poor to turn their lives around even if they live for another ten lifetimes.
The descendants of the poor cannot enjoy high-quality educational resources. Even if they study hard and have good academic performance, it is almost impossible for them to get a recommendation letter from a prestigious school.
Once you are demoted to a lower class in the United States, the chances of crossing over again are probably as difficult as "Do you believe that I am Qin Shi Huang or do you believe that he can cross the class?"
So, after seeing that the stocks he held heavily in the market had been smashed by twenty points, McPherson could no longer sit still.
If this performance is released tomorrow, investors who want to redeem their shares on the same day will swarm the company's doors.
And from then on, his company was doomed.
It's not just him, many people are like him.
In the current fragile economic environment, we cannot afford such losses.
Investors are like fickle monkeys. They can change the distribution plan, or they can get a little less, but they can never change from fickle three to fickle one. They cannot afford such a cost.
They decided to fight back. Even if the other party had big capital, they could mobilize a large amount of funds to enter the market as long as they were willing.
This time, they won't give their opponents any chance.
They have to defeat their opponents in order to survive.
It can also keep the market going up and maintain superficial prosperity.
On the surface they still have a choice, but in reality they have no choice at all.
Between bankruptcy and working hard, no one will choose bankruptcy.
As their funds entered the market, stocks were visibly pulled up.
In the U.S. stock market, such violent market fluctuations are very common, but many small stocks are buried in the overall market and are not known to the public.
It took less than five minutes to quickly pull from twenty points underwater to five points above water.
The funds in the market are very consistent. This time, each company has mobilized 10 to 20 million US dollars, and now only spent a few million US dollars.
Soon, the stock price touched ten points above the water.
This is a warning line, and a margin call may occur.
However, McPherson's expectations were ultimately dashed.
A large amount of chips were directly smashed down at this position.
McPherson's heavily invested stocks lost nearly 50 million U.S. dollars.
If they want to take such a large amount of chips, it will consume a lot of their ammunition.
I don’t know how much of the 100 or 200 million US dollars I prepared will be lost.
Fortunately, they are not fighting , but a group of people.
They had been mentally prepared, so they did not back down this time.
Quickly eat up the chips thrown by the opponent and continue to counterattack upwards.
This time, the chips appeared again...
It is still at ten points above the water.
What does this mean?
This means that the chips sold by the other party for the first time were not short contracts. If so, the margin call line would be pulled up.
"Hey, man, the other party has added another short position, and has thrown away his hedge chips. He is already a lion without claws. We can fight hard!"
Without hedging, those short positions are just decorations. The enemy can only keep adding margin or opening high-level short positions for hedging, which is equivalent to drinking poison to quench thirst.
The more the other party raises, the greater the loss will be when the position is liquidated.
This is a road of no return!
"Evan, this is still yesterday's drama. We will be treated like clowns!"
"Yes, we are clowns, but has it never always been like this?"
“I want to take this mask off.”
"You'll be beaten to death!"
McPherson didn't expect that his old friend didn't want to play at this time.
"Evan, we can't fight against big money, just like we can't look directly at the goddess at a cocktail party. As long as she glares at us, we will poop in our crotches."
"Fuck! What the hell are you talking about, you bastard! You want to be a traitor! Not only will you go bankrupt, you'll also lose your life!"
The so-called traitor is someone who sells away the chips in his hand at this position.
After all, it has risen by ten points. No matter whether you have a light or heavy position, it is easy to run away in this environment.
The price is to become a traitor to the entire group and let other funds bear greater pressure.
"Hey, Evan, I'm just joking. I will continue to hold our line of defense, just like I won't secretly date the young woman next door. My character is worthy of everyone's trust."
When McPherson heard this, his doubts were not dispelled, but became even more uneasy.
because……
He wants to run too!
I am already over 50 years old. As long as I can cash out at a high price, the chips in my hand will not be discounted.
He received more than 1 billion U.S. dollars in cash and paid out 700 million U.S. dollars to those investors, and he still had several hundred million dollars in his hands.
You can even buy a small island in Hawaii for vacation...
If he never comes out, those damn poor people will never be able to find him.
Soon, even under the pressure of a large number of short orders, the ten-point position was still broken through and quickly rushed towards fifteen points above the water.
There is no difference from yesterday, it’s just the shift of the liquidation line.
McPherson was moved!
Very, very exciting.
This may be his only chance, the only chance to control his own destiny.
At other times, he can only be a clown, but at this time he can control his own destiny.
As long as you sell a few of your heavily invested stocks at this position, your redemption crisis will be resolved, and you will only have to face suppression from your peers.
How can anyone not be selfish?
He called his old friend and said, "Old friend, I know you are anxious, but you'd better not be anxious. You have to think about the price of your betrayal. Even if you take the money to buy an island in Hawaii, someone will blow up your island!"
And he wasn't afraid, because he didn't have to go to Hawaii...
