"What? Xiang Yuan Hedge Fund is out of position?"
"That's right. The news just came out."
"What do you mean by out of position?"
"It means they lost all their money."
"666 … I can't believe they have such a day. I'll bet on Huanyu Group."
Stock trading will not be out of position.
That's because no matter how much the share price rises or loses, it is still the investor's money.
No matter how much the share price falls, it will not reach 0. That's why the investor will not be out of position.
However, it was a different story for some futures and options.
This was because this was not a physical delivery, nor was it a stock transaction. Similarly, he would use a certain amount of leverage.
That's why the investor must pay a margin for most options transactions.
When the investor's losses exceed the margin, the investor will be out of position. That means the investor will be forced to liquidate the investor's position.
Xiangyuan Hedge Fund was shorting Huanyu Group, and the business it adopted was to buy short options.
For example, Huanyu Group's share price is 100 USD. If I buy short options, when Huanyu Group's share price falls to 70 USD, that's a 30% drop, I will get 30 USD profit per share. If I buy 10,000 shares, that's 300,000 USD profit.
But if Huanyu Group's share price rises instead of falling, for example, it rises by 5%, then I will lose 5%.
Of course, a 5% loss might not seem like a lot. But what if I buy 1 million short options?
If it's 100 USD per share, 1 million shares is 100 USD. A 5% loss is 5 million USD.
Alright, 5 million USD is not a lot for Xiang Yuan Hedge Fund.
In that case, why did he use 100 times the leverage at this time?
That means the loss is not 5 million USD, but 100 times of 5 million USD. That's 500 million USD.
If Xiang Yuan Hedge Fund's margin is less than 500 million USD, he will be out of position.
Even if the stock price fell to the point that he had originally predicted, he would not be able to recover a single cent after his position was breached.
This is a complicated situation.
Many investors might not understand.
But it's fine if they don't understand. They just need to know that there will be a huge loss if their positions are out of position.
"Damn, the individual investors on the WSB forum are too powerful."
"Of course, one individual investor can't do anything to Xiang Yuan. What about 10 individual investors, 100 individual investors, 10,000 individual investors, 100,000 individual investors? Xiangyuan Hedge Fund will also be finished. "
"Let me tell you, there's a leader in the WSB forum. He used to be the vice president of AOL. He's the one who's commanding the war against the organization."
"Brothers, industry experts predict that the Xiangyuan Hedge Fund's sudden burst may mean that the share price of Huanyu Group will rise to 150 USD."
"150 USD? F * ck, is that real?"
"Of course it's true."
"I can't wait any longer. I want to buy Huanyu Group's shares.
Now, Huanyu Group's share price was only 105 USD. It was still a long way from 150 USD.
At this time, the news that Xiangyuan Hedge Fund was finished spread in the market. A group of individual investors who were watching the show outside the market rushed to Huanyu Group like crazy.
"I'll buy it, I'll buy it, I'll buy it."
"Kill that Xiangyuan Hedge Fund."
"Hurry up, brothers. It's time for revenge."
Although it was common for stocks to explode, it wasn't common for organizations to do so.
More often than not, when a certain institution or hedge fund's positions were exposed, it meant that they had suffered heavy losses.
At this time, the Xiangyuan Hedge Fund's sudden burst was like a shot in the arm for the individual investors.
What did it mean that even an empty fund was done for?
It meant that Huanyu Group's share price was about to rise.
"What's going on?"
"Oh my god, why did the buying suddenly increase by so much?"
"Oh my god, Huanyu Group's share price has increased by 10%."
The people in charge of the organizations were stunned.
Previously, they could see that the individual investors couldn't hold on any longer.
But they didn't expect that a few minutes later, the situation would change.
The individual investors who couldn't hold on suddenly had a large sum of money.
Although this sum of money wasn't a lot, some were tens of thousands of USD, and some were only a few thousand USD.
But no matter how small the sum of money was, it couldn't hold up against so many people.
The individual investors flooded in like a tide. Huanyu Group directly launched a rocket.
From the original 105 USD, it jumped to 110 USD.
"F * ck, this is?"
"Impossible, this is impossible."
"Everyone, did you go easy on them?"
Andrew couldn't believe it.
"Go easy on them? Go easy on your sister. Did we go easy on them?"
"If we didn't, why is the market like this?"
"You ask me, I want to ask you too."
"Everyone, we have an agreement."
"F * ck, don't talk about the agreement. We really didn't do anything."
"Then how do you explain it?"
Andrew was completely furious when he pointed at the 10% increase.
They had bought the option to short Huanyu Corporation, and they had even used 100 times the leverage.
The more Huanyu Group rose, the more losses they would suffer.
Don't underestimate the increase of only 10%.
But now, they had incurred a loss of 300 million USD.
Fortunately, Xiang Yuan was very strong, and their deposit was more than sufficient.
Otherwise, Fragrant Fate's stocks would have been blown out of proportion.
However, Xiangyuan didn't go bankrupt. But the news about Xiangyuan going bankrupt quickly spread in the media.
"Andrew, did you guys go bankrupt?"
Looking at the news on the media, several people in charge of the organizations asked.
"Bankrupt?"
Andrew shook his head. "How is that possible? How can we go bankrupt?"
"Andrew, don't hide it. The media has exposed it."
"Bullsh * t. Don't you know Xiangyuan's strength? Not to mention that we didn't go bankrupt, even if we did, we can increase the deposit … What? You're saying that the media reported that we went bankrupt? "
"Yes."
"Where is it?"
"Just search the Internet. It's everywhere."
"F * ck …"
Andrew opened Yahoo.
Sure enough, the headline on the front page was the news of Xiangyuan Hedge Fund going bankrupt.
"F * ck, who did it?"
Andrew cursed loudly.
He knew that Xiangyuan was screwed over.
"Release the news to the media immediately. The previous news is fake."
Immediately, Andrew took public relations measures.
However, although Andrew acted quickly, countless onlookers directly ignored Xiangyuan Hedge Fund's statement.
A group of netizens even went crazy and attacked Xiangyuan Hedge Fund.
"So what if they went bankrupt? Is there a need to lie to everyone?"
"Heh, Xiangyuan, to think that you would have such a day.
"Didn't you release the report of Huanyu Group's short? Come on, continue to short."
"I want to know, how much did you lose?"
It could be said that …
A hedge fund like this was notorious.
Previously, many people couldn't do anything to them. Now that they saw Xiangyuan Hedge Fund going bankrupt, it was really satisfying.
Even if they explained and made a statement, the onlookers ignored them.
Furthermore, after Xiangyuan Hedge Fund's statement was released, Huanyu Group's stock price soared by 5% again.
Yes.
The original increase was 10%. Now, it had risen to 15%.
This increase was nothing for some small cap stocks.
However, for Huanyu Group with a market value of 180 billion US dollars, a 15% increase was shocking.
However, this was not the end.
After Huanyu Group's stock price soared by 15%, it aroused the enthusiasm of many individual investors.
"Brothers, let's go. Xiangyuan is finished."
"Look, Xiangyuan just released the statement and Huanyu Group's stock price soared. What does this prove? This proves that they really went bankrupt."
"Yes, I didn't expect them to have such a day. I've invested all my money in Huanyu Group."
Hence …
A magical phenomenon appeared.
With the participation of all the individual investors, Huanyu Group's stock price was no longer controlled.
It rose by 17%.
It rose by 20%.
It rose by 25%.
It rose by 30%.
It rose by 32%.
At the end of the last 10 minutes, Huanyu Group launched another rocket and the stock price soared by 40%.
At this moment …
Looking at Xiangyuan Hedge Fund's account, they had already lost 1.2 billion US dollars.
Looking at their deposit.
Andrew was so shocked that he gasped.
As long as Huanyu Group's stock price rose by 1%, Xiangyuan Hedge Fund would really go bankrupt.
You've already exceeded your reading limit for today. If you want to read more, please log in.
Login
Select text and click 'Report' to let us know about any bad translation.
