On the evening of the 51st day, the ever-busy Yang Bingzhong once again arrived at Ju Qingng’s villa to visit his "badly injured" subordinate, Ren Zhong.
Yang Bingzhong could swear to the heavens he had never been this filial to his own parents.
Today’s conversation between the two was even warr than yesterday’s.
After spending a night pondering, Yang Bingzhong was utterly amazed by Ren Zhong’s incisive foresight, marveling at his insight.
This morning, the previously steadily rising stock market experienced a small-scale, widespread decline.
The stocks Yang Bingzhong held plumted considerably.
But he had already cleared his positions according to Ren Zhong’s instructions.
His significant holding, Tianzhang Technology, which accounted for more than 80% of his portfolio, still stood out prominently among competitors.
With reduced losses there and increased gains here,
The difference between the two was no longer as simple as nine million.
That night, Ren Zhong didn’t teach Yang Bingzhong any major operations, only advising him to continue holding Tianzhang Technology and then guiding him to open a small short selling position with a margin account.
The target was a Crystal Chip modification enterprise, a second-level subsidiary of Deep Communication Group, mainly focusing on providing integrated modified chip modules for low to mid-range military equipnt of Source Star Military Industry, with a product line covering Third Level and below professions and equipnt.
During the previous volatility, this company had already undergone a round of valuation adjustnts.
When Ren Zhong pointed out this stock, Yang Bingzhong was sowhat puzzled. He thought the company was already at a bottom within the range, with little room for further decline. Not buying at this low was conservative enough, so how could one short it?
But upon seeing Ren Zhong’s silent smile, Mr. Yang imdiately realized he had beco presumptuous, mistaking ignorance for capability in his market judgnts once again.
"Mr. Yang, if you’re uneasy, you can consider cashing out these small stocks and putting a million points into your margin account. Start with a small-scale test by shorting stocks worth around a million points?"
Yang Bingzhong shook his head, "What’s the point of a million points? I still have over 20 million points in idle funds. I’ll handle it when I get ho tonight. It won’t be too late, right?"
"No, the timing is just right."
At night, Yang Bingzhong, in the hibernation space, sent his bold operation to Ren Zhong.
He used 20 million points as collateral to short stocks worth 100 million points from a brokerage under the Deep Communication Group.
Utilizing his Fourth Level Citizen privileges, he leveraged five tis.
This ant he borrowed stocks from the brokerage to sell while freezing nearly 100 million points in his account, after deducting transaction taxes and fees.
If this stock continued to fall, and its price cut in half,
Then at 50%, Yang Bingzhong could repurchase the equivalent stocks at a cost of around 50 million points to return them to the brokerage, pay the loan’s daily interest, and the remaining funds would be his profit.
However, assuming the stock didn’t drop but rose instead, when it climbed by about 20%, it would trigger the notorious margin call in the stock market.
The brokerage would confiscate Yang Bingzhong’s 20 million-point collateral, and independently pull out nearly 100 million points, completing the stock repurchase at a total price close to 120 million, ensuring equivalent cost coverage after deducting transaction taxes, fees, and due interest.
The brokerage breaks even, making a small profit from interest, while Yang Bingzhong faces a catastrophic margin call.
Of course, he also had another choice: quickly adding more funds to the sa account to raise his purchase cost price and increase the margin call threshold when it was triggered.
It seed that as long as there were unlimited funds available, one would never face a margin call.
But in reality, compared to the massive stock market, no one has unlimited funds, not even the ga public funds, which are just a drop in the ocean.
In the ruthless stock market, many citizens often fall due to this issue.
Whether shorting or longing, once investors make a wrong judgnt and stubbornly resist, they can only take family loans, mortgage everything they can, including their citizen credit, or even their own and their children’s human rights, in exchange for a reprieve.
Yet the cruelty of the market often lies in its indifference to human will.
Investors leveraging to amplify returns are also magnifying risks, further exponentially exposing their human flaws, until they reach desperation without a turnaround, only to plunge into a fiery inferno in countless cases.
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