However, because this was a bull market.
Investors had long since formed a fixed bull market mindset in their minds, instinctively ignoring risks and amplifying positive news.
Under such a thought process, even when facing a market crash and having their accounts wiped out,
everyone would find a heap of reasons to comfort themselves, saying it was a normal pullback in a bull market, and as long as they held onto their chips tightly, or doubled down on their positions at the low point of the pullback, once the market rebounded, the temporary losses would surely be instantly offset by the rebounding profits.
Therefore, although in reality, market valuation bubbles were serious and the risk of a crash was growing,
on the surface, whether it was the major stock investment forums where retail investors gathered online, the analysis reports publicly released by industry institutions, or the statements from various financial media, there was still a chorus of bullish sentiment, a scene of 'peace and prosperity'.
Especially in the face of today's market crash.
In the evening, an industry institution analyst and a well-known financial media outlet,
methodically put forth the view that this round of adjustment was merely a 'technical adjustment,' using various macroeconomic analyses and policy interpretations.
Furthermore, on the homepage of the financial media website that declared 'technical adjustment',
a market analysis article titled 'Don't Panic, This Is Just a Technical Adjustment' was timely published, to comfort the large number of dispirited investors.
Su Yi looked at the various bullish comments from these 'demons and monsters' online and just wanted to laugh heartily.
Once upon a time, he too had been misled in this way.
But now, he clearly knew that the Shanghai Composite Index could not return to 5000 points; the booming bull market had ended, and what followed...
The market would only crash, repeatedly.
"Su Yi, can you lend me some money? I'll pay you back in a couple of days."
Just as he continued to refresh various market news and watched the 'demons and monsters' perform, a university classmate he hadn't been very familiar with or in touch with before sent him a message on WeChat.
"I still owe rent right now, how do I have money?"
Su Yi replied casually.
"Aren't you working at 'Huaxi Capital'? I heard that company offers good salaries in the industry,"
The other party continued.
"Can you lend me some? A few thousand or ten thousand yuan is fine, I really need it urgently."
Su Yi replied,
"I really don't have any. I only have a few hundred yuan on me right now."
"Then does your company have any insider information about stocks?"
The other party asked again.
"My stocks have been trapped so badly recently, I'm about to get margin called."
Su Yi replied, "I'm no longer at 'Huaxi Capital', and I'm currently unemployed."
"Oh."
Seeing that his information was wrong, the other party didn't say much more.
"Then you're still in Modu, right? When we have time later... let's all get together."
Su Yi replied with an 'okay,' and then the other party fell silent.
Of course, he also knew that this was just the other party speculating in stocks with leveraged funds, having been severely trapped, urgently needing to replenish margin, and in desperation, turning to him for help.
Such things had happened several times in his memory.
"Mr. Su, I just received an internal company notification. Starting tomorrow, brokerage firms will no longer add new trading accounts for off-exchange leveraged financing institutions, and according to the regulatory notice received by the brokerage firms, all existing off-exchange leveraged financing trading accounts are also required to be cleared by the end of this month."
As Su Yi pondered, Chen Anya suddenly sent him a message on WeChat.
"It's currently unknown if the stock index futures trading account you operate will be affected, but I still hope you can be mentally prepared."
Su Yi saw the message and asked,
"Is the regulatory body starting to clean up off-exchange leveraged financing?"
Chen Anya replied,
"It seems so. As far as I know, many industry leveraged financing institutions like us received the same request from their partner brokerage firms tonight."
"It seems the news started to spread during the day,"
Su Yi thought, considering today's crash.
He immediately opened a financial news platform for a look.
He saw that the latest market news did not contain any clear announcements or reports about the regulatory body clearing off-exchange leveraged financing, but... many similar topics had already appeared on stock investment discussion platforms where retail investors gathered.
Su Yi briefly browsed through these topics.
He was surprised to find that although it was clearly negative news for the market, in everyone's discussions, the vast majority of opinions held that the regulatory body's cleanup of off-exchange leveraged financing would not have too significant an impact on market trends; some even believed that this approach by the regulatory body would contribute to the healthier development of the bull market.
In short, regardless of whether the market news was negative or positive,
the large investor group, constrained by the bull market mindset and influenced by past extreme profit-making effects in the market, interpreted everything as positive news.
When everyone collectively turned a blind eye to negative news and subconsciously amplified positive news,
Su Yi knew that the bull market was definitely over.
Regardless of how people emotionally interpreted the news of the regulatory body cleaning up off-exchange leveraged financing,
those investors who were actually involved in leveraged financing were still quite panicked internally, as their accounts could not withstand excessive market pullbacks after all.
Amidst this brewing sentiment of widespread panic among leveraged investors, while ordinary investors remained actively bullish,
The next day, Friday, June 19th.
The Shanghai Composite Index unexpectedly gapped down and crashed by 2.5%, falling below the 4700-point mark.
Among them, the main contract for the CSI 500 Index stock index futures, held by Su Yi, gapped down even further, crashing to 3.22%.
Su Yi watched his holdings account rapidly surge to a floating profit of 2.92 million yuan, feeling a bit surprised.
Beside him, General Manager Lin looked at the Shanghai Composite Index opening down 2.5% on the trading screen, and the additional losses of over 2 million yuan in his own account, feeling completely numb, utterly unable to comprehend such a market trend.
Similarly, at this moment in the trading room,
the other trading clients, watching the market open with a direct crash, also showed expressions of shock and complete incomprehension.
One trading client even sprang up from his chair instantly, his face gradually turning pale.
On the computer screen his gaze fell upon, the stocks in his leveraged trading account showed a limit-down formation, and the total loss in the entire account had already exceeded his invested principal.
In other words, even if he had timely replenished some margin before the market opened,
his account was still liquidated at this moment.
Seeing the man who had abruptly stood up from his chair, a hint of sympathy appeared in the eyes of others, but beyond sympathy, the same despair was continuously spreading in the hearts of all investors who were fully leveraged and long.
(End of Chapter)
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