Chapter 4 - Break the Limit-up Board

"Hey Mom, already had lunch." "Wenjing? She's been swamped with work lately—I'll find time to talk to her." "Won't be coming home for May Day. Tell Dad for me, and you two take good care of yourselves..." Having just returned from his afternoon walk, Lu Liang answered his mother's call. She was asking why Lin Wenjing wasn't picking up her phone. He barely managed to fob her off when his father called right after. "Did you two have a falling-out?" Lu Jianjun's weathered voice came through the phone. "We got divorced last month." Lu Liang hesitated for a moment before telling the truth. Of all family bonds, the father-son relationship is the most unique and contradictory—admiration in childhood, estrangement in adolescence, then gradual understanding as the years go by. That's why Lu Liang always told his father the truth, but lied to his mother. "So it's come to this." Lu Jianjun sighed. Though he didn't live with his son and daughter-in-law, after years of occasional visits, he knew exactly what kind of person Lin Wenjing was. Their humble family was too small to hold such a high-flying woman. He didn't ask for the reason. "When are you going to tell your mom?" "Been pretty busy lately. I'll head back home at the end of next month." "Let me know when you're coming." There was a long silence. Lu Liang spoke softly, "Dad, I've got some stuff to take care of." Telling the truth didn't mean they had much to talk about. Lu Jianjun said, "Off you go then—take care of yourself." "You too." After hanging up, Lu Liang stepped out of the stairwell and ran straight into Li Manli, who was heading out to get a delivery. She'd been standing there for a while, seemingly having overheard part of the conversation. She jumped in surprise at the sudden sight of him. "N-n-good afternoon." Li Manli looked flustered, a flicker of barely concealed disdain in her eyes. They hadn't grown closer over the past few weeks, but as next-door neighbors, they'd gradually figured out each other's daily routines. She'd assumed Lu Liang was unemployed—she could always hear him coming and going from his apartment every afternoon. Now learning he was divorced on top of that, she thought a middle-aged, jobless divorcee was practically a hopeless case. She wanted nothing to do with him. Lu Liang shot her a cold glance, said nothing, and went back to his own place. "Serves him right, getting dumped by his wife." Li Manli scowled, muttered under her breath, and retreated to her apartment too. ... Time flew by. Fourteen more trading days passed, and Baofeng Technology's reputation as the "stock demon god" spread across the entire financial market. Twenty-nine consecutive, flawless one-word limit-ups—a new record for the longest winning streak in A-share history. The stock price surged past the triple-digit mark, hitting an astonishing 113.26 yuan. The value of Lu Liang's holdings skyrocketed to 3.8505 million yuan. But that wasn't enough to satisfy him. Taking advantage of the upcoming Saturday and Sunday, Lu Liang paid off all his loans for the month, leaving him with 250,000 yuan in hand. He'd been holding onto that 300,000-odd yuan for over a month, waiting for this exact moment. From his observations, the stock would break its limit-up streak any day now—but there was still triple the profit to be made before it peaked at 327 yuan. He was determined to go all in and seize this once-in-a-lifetime opportunity. That night, Lu Liang asked Zhao Haisheng out for a late-night snack. Zhao Haisheng sighed with emotion, "Brother Liang, congratulations! You've struck it rich overnight!" He'd been the one to help Lu Liang apply for the lottery codes and knew he'd won 68 lots. Countless investors applied for IPO lotteries every time, and many won shares—but Lu Liang was the one he envied the most. He'd hit the jackpot with the "demon king" stock, and as a ChiNext-listed stock with a small market cap, it was perfect for speculative trading. As of yesterday, the stock had already soared 15.86 times its issue price. "It was just dumb luck—can't expect to win this many lots every time." "True enough. In all my years in the business, the most anyone's ever won with 5,000 lottery codes is 76 lots. The average is around 30-odd." Zhao Haisheng could only envy that kind of luck. Ultimately, it came down to the ChiNext board's small market cap and 300,000-yuan entry barrier. If it had been a main board stock (with a ticker starting with 60), winning even 5 lots with 5,000 codes would've been a miracle. The main board had almost no subscription threshold, drawing hordes of investors—its winning rate was a mere 0.05%. "Haisheng, I have a feeling this stock's going to keep climbing." After a few beers, Lu Liang slowly got to the point—he wanted to open a margin trading account. Zhao Haisheng looked shocked. "Brother Liang, you're that confident in Baofeng Technology?" Lu Liang smiled, "Confidence's not the word. I've just had a lucky streak, made some money—I don't mind losing a bit if it doesn't work out." "Easy for you to say now that you've cashed in big." Zhao Haisheng chuckled, half-amused and half-helpless. "How much capital do you have?" He had no intention of talking Lu Liang out of it. After all, he earned a commission from this; their relationship was strictly client and broker. Though interestingly, years ago when Zhao Haisheng was buying a house, Lu Liang had been the real estate agent—now their roles were reversed. Lu Liang said, "Not much—just 250,000 yuan. How much leverage can you get me?" Zhao Haisheng thought for a moment. "I can hook you up with 2x leverage—that's 500,000 yuan. We'll provide the securities account." "Deal." Lu Liang had considered off-market margin lending, but decided against it—it was illegal, and more importantly, unsafe. Zhao Haisheng worked for Guotai Securities, a legitimate firm. The leverage ratio was lower, but it was secure and reliable. The following Monday morning, Lu Liang went to the Guotai Securities branch. By 9 a.m., he'd secured the 500,000-yuan margin loan, giving him a total of 750,000 yuan in available funds. The brokerage hall was packed. For the first time in eight years, the broader A-share market had broken through the 4,000-point mark. Countless investors were convinced—the bull market was here, and the index would soon surge to 5,000, 6,000, even 7,000 points. Lu Liang believed it too. He found an empty seat and waited quietly for the pre-market auction to start at 9:15 a.m. As expected, after the China Securities Regulatory Commission's warning, the company's own risk disclosure announcement, and two days of weekend speculation, Baofeng Technology's limit-up streak was broken. In just three minutes during pre-market trading, the stock plummeted from its daily upward limit to the daily downward limit. Bid prices swung wildly by over 3% each time, as institutional investors took turns buying and selling, driving the price up and down. A month and a half ago, Lu Liang hadn't been familiar enough with the rules, and his mood would've swung with every price fluctuation. But now he knew—the first eight minutes of pre-market auction were just noise, completely meaningless. The real price discovery happened in the final two minutes, from 9:24 to 9:25 a.m. Because pre-market auction ended at 9:25, every order placed in those two minutes had a chance of being executed. Institutional investors grew much more cautious, unsure if retail investors would maintain the same enthusiasm as the previous week. After ten minutes of chaotic pre-market trading, the stock finally opened at the previous Friday's closing price—113.26 yuan. Lu Liang went all in. He bought an additional 6,600 shares, pushing his position to 99.5% of his account balance. Only a little over 3,000 yuan remained available. 6,600 shares were a drop in the bucket compared to the hundreds of thousands of shares being traded each minute. But it was as if the market makers had been waiting for him—no sooner had his order been filled than the stock price plunged by 5%. Zhao Haisheng received a margin call alert and rushed over. "Brother Liang, you went all in?" "I was worried I'd miss out if the price surged back up and hit the limit-up again, so I bought the moment the market opened." Seeing how calm Lu Liang was, Zhao Haisheng couldn't help but warn him. "Brother Liang, if Baofeng Technology hits the daily downward limit and stays there today, it'll most likely open with another limit-down tomorrow." Once a "demon stock" that had racked up 29 consecutive limit-ups started falling, it would take at least three to five limit-down days to stop the slide. Though the margin call threshold was set at a 30% loss, the brokerage would often liquidate positions early to protect their own interests. "I get it, I understand." Lu Liang kept his eyes fixed on the big screen in the hall, then suddenly smiled. "But it looks like we don't have to worry after all." Right as they were talking, a massive bullish candle shot straight up on the screen, as wave after wave of large buy orders swept the market.