"President Su, my Investment Department II is ready, just waiting to make a big splash in the GBP exchange rate market."
After the instant messaging link was established, Meng Shengfei, the investment manager of Huayin International's Investment Department II, quickly said,
"The GBP exchange rate is already near 1.5440. Isn't President Su preparing to counterattack?
This exchange rate threshold... The market rumor of your institution's liquidation limit at 1.5500 is getting closer and closer.
If you don't counterattack at this time, once the GBP exchange rate is allowed to break through the 1.5500 threshold, it might further trigger panic among existing short position holders in the market, causing many short position holders to cover their positions out of panic, thus leading to a stampede."
Su Yi responded,
"I'd like to counterattack, but unfortunately, my capital volume is insufficient. I can only rely on Manager Meng to save the day."
"Haha…"
Meng Shengfei laughed and said,
"President Su wasn't so humble before. However, the leadership didn't approve much capital allocation for our Investment Department II, and I don't know if it's enough to guide the GBP exchange rate market trend, or if it can withstand the strong short squeeze from the bulls at this position!"
"Old Meng, don't be so smug after getting a good deal."
Hearing Meng Shengfei's words, Kong Fansheng of Huayin International's Investment Department I responded,
"The capital allocation that General Zhang approved for your Department II is much more than ours in Department I. With that... you're still not satisfied? If you're not satisfied... how about we switch?"
Su Yi heard their words and was very curious about how much investment quota Zhang Yanshun had secured from the leadership.
However, he certainly couldn't ask about the specific investment amount, he could only guess that it was probably at least several hundred million US dollars.
After all, too small a capital volume is basically useless for influencing market trends.
"Forget about switching."
Meng Shengfei replied, and the topic then shifted to the idea of establishing positions.
"President Su, in my opinion... the 1.5500 threshold for the GBP exchange rate should be a must-hold for the bears, right? If this threshold is lost... the bulls in the market will pursue the victory, and the remaining heavily-losing bears might not be able to withstand the pressure and won't last until the June 23rd referendum."
Su Yi said, "
Manager Meng is right, but this threshold isn't that easy for the bull institutions in the market to break through."
Kong Fansheng responded,
"Oh? Does President Su already have a strategy?"
Su Yi confidently replied,
"Naturally, I have a strategy. Huayi Capital has never been an investment institution that sits idly by, but the time is not yet ripe. We still need to lure another wave of bulls."
Meng Shengfei said,
"Alright, we'll listen to you. After all, this long-short battle in the GBP exchange rate market was initiated by you, and you should be the commander-in-chief of this battle."
Regarding Su Yi's view of not rushing to establish positions to block the bulls in the market.
Both Meng Shengfei and Kong Fansheng fully agreed.
As the saying goes, "good steel must be used on the edge."
Since Su Yi used the existing short positions held by Huayi Capital as bait to entice the bulls to continue investing funds for a short squeeze.
Then, funds should not be wasted on meaningless point contests.
After all, compared to the major bull institutions hunting Huayi Capital, even if Huayin International entered the market, they would still be at an absolute disadvantage in terms of capital volume.
Since they were at an absolute disadvantage in terms of capital volume.
Then, to reverse the market situation, they would have to rely on the influence of news and the power of existing bulls or existing bears in the market.
Su Yi smiled and said,
"What commander-in-chief, not commander-in-chief… If your ideas and expectations align, I'm just cooperating with both of you."
Just as Su Yi established instant communication with Huayin International's Investment Department I and II, planning a joint attack.
Other major institutions also in Hong Kong City.
Especially in the GBP exchange rate market, having established massive long positions and with the 1.5500 point threshold in sight.
Institutions like Mitsui Sumitomo Investment Company, Huifeng Global Asset Management Company, Pacific Capital Hong Kong Branch, Tianhe Capital, and other major fund managers, all began to simultaneously inject larger amounts of capital, attempting to push the GBP exchange rate past the 1.5500 point threshold in one go, forcing numerous short institutions in the market, particularly Huayi Capital, to cover their positions and stop losses, thereby blowing up the main short positions in the market.
"This market trend is truly exhilarating!"
As the short squeeze by the bulls continued, Gu Chijiang of Tianhe Capital's trading department said excitedly.
Thanks to the combined short squeeze by the bull institutions in the market, his long positions on the GBP exchange rate had already achieved a floating profit of over 40 million US dollars.
"President Gu, judging by the situation, the GBP exchange rate breaking through the 1.5500 threshold should be a certainty."
Trading team manager Xie Hongxing said,
"It seems that Huayi Capital cannot escape the fate of having its positions liquidated. Once the GBP exchange rate quickly breaks through the 1.5500 threshold, the confidence of the main short institutions in the market should completely collapse."
Gu Chijiang nodded with a smile,
"That is beyond doubt. Old Xie, continue to increase long positions. If we don't pursue the victory now, when else will we?"
Xie Hongxing nodded and asked,
"How much long position should be added?"
Gu Chijiang smiled and replied,
"Just increase positions with all the floating profits. The downward path of the GBP exchange rate has basically been completely blocked. As market trading time progresses, the survival space for bears in the market will only become more difficult. Moreover... with such a clear bull dominance at this time, would anyone still dare to short on a large scale?"
"I don't think there's such a fool."
Xie Hongxing said with a smile.
Immediately, after Gu Chijiang finished giving instructions, Xie Hongxing instantly turned and issued the corresponding command to continue increasing long positions to the traders in the trading room.
At the same time...
The Huifeng Huanyu No. 1 hedge fund, managed by Godfrey, was also significantly increasing its long positions.
"Mr. Godfrey, more and more short position holders in the market are starting to stop losses and close their positions."
As the GBP exchange rate continued to rise, quickly breaking through 1.5450 around 2 PM, lead trader Gerald reported to Godfrey,
"The total open short positions in the market are sharply decreasing."
Hearing this, the smile on Godfrey's face grew wider.
He laughed and said,
"This indicates that many bears in the market can't withstand the pressure and are fully stopping losses. It also means that with the market short squeeze reaching this point, the situation where bears in the market stampede each other and a host of major short institutions get liquidated is not far off."
Gerald nodded in response,
"Hmm. I estimate that the 1.5500 point will be the final psychological threshold for all the bears in the market."
Godfrey responded,
"I think so too. So let's push harder. Our fund's reserve capital is still very ample. We can take advantage of this time to invest more funds. As long as we blow up the short positions in the market, the capital we invest will yield very substantial profits."
Seeing that they were only one step away from blowing up the main short positions in the market.
The greed in Godfrey's heart was simply uncontrollable.
Similarly, it wasn't just him...
At this moment, major bull institutions in the market such as Navigator Capital, Pacific Capital, Mitsui Sumitomo Investment Company, Barclays Bank Foreign Exchange Trading Center, Hashimoto Capital, etc., all saw the sharp decrease in existing short positions.
They also realized that the bearish sentiment in the market was completely collapsing, and they all began to increase capital investment, frantically short squeezing, and putting in more long positions to drive up the GBP exchange rate.
Under such a full-scale pursuit by the bulls and a massive capital short squeeze.
At 4:30 PM, as trading time just entered the European session, the GBP exchange rate accelerated its ascent to around 1.5470, truly just one step away from the bears' psychological breaking point of 1.5500.
At this time, the existing short positions in the market had rapidly decreased to below 1 million lots.
Conversely, existing long positions exceeded 2.1 million lots, with net long positions reaching the million-lot level.
"Now is the time…"
Facing a market completely skewed towards the bulls, with bears in a precarious position, and at the moment when a short stampede and extreme market volatility were about to occur in the entire GBP exchange rate market, Su Yi intently gazed at the GBP exchange rate trend, murmured, and then said to Meng Shengfei and Kong Fansheng, who had been waiting for a long time:
"Manager Meng, Manager Kong, establish a large number of short orders at this position. Curb the rapidly decreasing short positions. It's time for us to engage in a head-on battle with these greedy bull institutions in the market."
Meng Shengfei and Kong Fansheng quickly responded and immediately instructed their traders to invest funds and establish short positions.
And just as the two were making their full move.
Frederick, the main hedge fund manager of Aberdeen Asset Evolution No. 1, who had been coordinating with Su Yi, also called:
"President Su, isn't it time to cast your net with your bull-luring strategy? The market's short power has begun to collapse. If you don't cast the net now, your net will be completely torn apart by the continuous short-squeezing bull forces in the market. At that time... not only you, but our institution's main fund might also be instantly liquidated."
Su Yi replied,
"We are already reeling in the net. However, I need Mr. Frederick to help hold the 1.5500 threshold. At the same time, I will have people release ample news into the market to stimulate the plate, and Mr. Frederick, your many media outlets controlled by Aberdeen Asset can also take action."
"I have already informed the group's board of directors and asked them for help, Moreover, institutions like BNY Mellon and Citibank should have already noticed the true purpose of the Bank of England's attempt to cover up."
Frederick said.
"Then let's wait for the market news to ferment,"
Su Yi said with a smile.
Immediately, he then had the company's technical department, with Frederick's consent, establish an instant network connection with the other institution's trading department, to facilitate coordinated operations among the various institutions and combat the overwhelmingly aggressive bull forces in the market.
At the same time, Su Yi quickly instructed Wang Huaijin.
He told him to use the greatest publicity power to clarify the rumors he had deliberately spread earlier, and to publicly disclose Huayi Capital's current holding data and still very ample capital reserves to the market.
After doing all this...
Su Yi also utilized his social media accounts.
He continued to publish a detailed analytical article bearish on the GBP exchange rate, pointing out the fundamentals of the EU economic recession, and the underlying reason why the Bank of England rapidly intervened to stabilize the market exchange rate: because the Brexit referendum was very likely to have variables, and directly asserting that the referendum result, as uniformly expected by major global investment institutions, was clearly biased.
Furthermore, after publishing the bearish analytical article.
Su Yi again posted a declaration of war, written in English, on an external investor communication platform, directed at various global investment institutions and market bull institutions.
It stated that the historical era when foreign capital institutions could freely harvest Chinese capital institutions had completely passed.
And firmly declared that the current GBP exchange rate market would bury all investors who dared to go long at this stage.
After he had done all this...
Before the various news had fully fermented.
Various media outlets in different countries controlled by Aberdeen Asset, a global asset management giant, simultaneously released sampling data on the Brexit referendum collected by Frederick recently, as well as public opinions from street interviews.
Of course, the real reason for the Bank of England having to sell foreign exchange to stabilize the exchange rate, as mentioned by Su Yi, was also clearly pointed out by Frederick through the media.
At this point, the core short major institution in the market, which had deliberately shown weakness and appeared unable to counterattack for a continuous month in the preceding period.
Finally, under Su Yi's leadership, revealed its fierce fangs.
Moreover, at the moment when these negative news pieces spread throughout the global network to the market.
Huayin International, as one of the Chinese capital institutions with extremely strong financial power, also responsible for internal and external RMB channel transactions, and holding trillions of capital, also publicly announced its formal intervention in the GBP exchange rate market, strongly bearish on the GBP exchange rate, and stated that if Huayi Capital needed new financing, their institution could provide corresponding credit.
With the continuous spread and fermentation of various news.
The instant and fierce counterattack by a host of major short institutions, including Huayi Capital, Aberdeen Asset, and Huayin International...
Instantly, they threw many major bull institutions in the market, who thought they had victory in hand and were fully investing funds to break the bears' last psychological defense line, into disarray.
And, before these bull institutions, who had invested huge amounts of capital and were deeply entrenched in the market, could react.
The previously sharply decreasing short positions in the market began to increase rapidly again.
At the same time, many speculative retail investors and hot money in the market who realized something was wrong also began to take profits immediately and cover their long positions.
Thus, as the news continued to ferment.
In less than half an hour, the GBP exchange rate plunged from around 1.5470.
It rapidly fell, crossing a space of nearly 70 points, returning to around the 1.5400 threshold, causing all newly added long positions that had concentrated on increasing positions during the day to fall into a temporary loss state.
(End of Chapter)