Chapter 1860 Short Selling
"It should be because of time. These rumors on the domestic Internet have not caused any big impact in the United States at present," said Lao Chen, looking at the annoyed Mr. Wang.
"Is the impact we have caused not enough? Or does such news need time to have an impact in the United States?" Mr. Wang asked.
He still has a lot of insights on the issues he cares about.
This matter is so lively in China at present, and it is still one-sided. Although I don’t know if Director Yang will have any back-up, it is obviously difficult to form a public opinion that is more influential and more unfavorable to Feng Yiping than now.
Therefore, it is best that the US market needs time to digest this issue, and it is best that tomorrow, after digesting this news, things can develop in the direction that everyone expects.
Otherwise, the results of this big preparation will really be greatly discounted.
Lao Chen, who knows Mr. Wang’s temper very well, will not say all nice things at this time, "They hope it is because of time,"
That is, it is not ruled out that the strength of public opinion is not enough this time.
Mr. Wang glanced at Lao Chen coldly. A plan that looks very perfect, the final effect will be greatly discounted?
No, he will never allow it.
"Put me in Director Yang," he said to Lao Chen.
His call was picked up quickly, and Director Yang was quite pleased with the thoughtful reception from Mr. Wang yesterday. "Hello, Mr. Wang, is there any good news?"
He gave the American part to Mr. Wang directly, and did not intervene.
"Director Yang," Mr. Wang called, and his tone was completely different from yesterday.
Director Yang immediately felt the chill from Mr. Wang's first sentence.
This chill came from two aspects. First, this person really changed his face very quickly. Not only did they sit around the stove together and eat hot pot together yesterday, but they also praised him and the plan he had set in their words. But listen to his tone now.
Is it very unsuccessful? It shouldn't be!
"Your plan is not good. There was no reaction from the United States yesterday," Mr. Wang said.
This was a bit harsh for Director Yang. Didn't he praise his plan yesterday? Why did he change suddenly now?
From this point of view, Mr. Wang is indeed a bit like his father. They are both the kind of people who don't care about the process, but only care about the results. They mainly judge right and wrong based on interests.
"Don't get excited first, talk about it carefully," said Director Yang.
From the opening to the closing of the market yesterday, the listed companies under Feng Yiping did not change much, whether in terms of trading performance or final prices.
"The traders in the United States think that news of this level will not be as smooth as we expected, and will also have an adverse impact on Feng Yiping in the United States," said Mr. Wang.
"What was the specific situation yesterday?" Director Yang asked.
"The decline was only a few percent, almost calm," said Mr. Wang.
"Could it be because of time factors," said Director Yang, "In the United States, it may not be possible to receive news so quickly,"
"What if it is the same tomorrow?" Mr. Wang asked mercilessly.
"Let me sort it out again," said Director Yang, "you can also think of a way,"
"I still have the original opinion. It is actually the most cost-effective to share this news and plan with some institutions," he said.
But Mr. Wang has always been uninterested in such suggestions. He thinks, why should he share such a good opportunity with others?
In addition, if he actively discloses such news to the outside world, wouldn’t he appear to be somewhat incompetent?
“Let me think about it,” he said.
Fortunately, judging from the results, he still made some money anyway. The only reason he felt dissatisfied and annoyed was that the amount of money he made was too far from what he had originally expected.
What Mr. Wang is discussing with Director Yang now is also one of the reasons why he was so polite to Director Yang yesterday.
Because Director Yang’s plan is not to discredit Feng Yiping as the ultimate goal, but to discredit Feng Yiping and affect Feng Yiping’s Forex, so that they can profit from it. This is the ultimate goal.
Yes, it is short selling.
In terms of how to make capital earn more profits faster and thus have more capital, the United States does have many more ways than us, and being able to short sell individual stocks is one of the most important ones.
The simplest way to short sell is that if you determine that a stock has a downward trend in the short term or a longer period of time, you can borrow the stock from the brokerage firm at the current high stock price and sell it, and then buy the same number of stocks back to the brokerage firm after the stock price drops, thereby earning the difference.
For example, if there is a stock that is currently priced at $10 per share and you believe it will fall next, you can borrow a certain number of stocks, such as 100 shares, from a securities clearing company, the largest of which is Merrill Lynch in the United States, and then sell them for cash.
If you sell at an average price of $10, you will have $1,000 in your hands.
If the stock price falls as you expected, and falls to only $8 per share, you buy 100 shares and return them to Merrill Lynch to settle the account, then you will make a profit of $200 in the process.
Of course, this is not pure profit, and you will naturally pay Merrill Lynch for lending fees, interest, and clearing fees.
If the contract you signed with the brokerage firm has a long period, or you are particularly lucky, before the contract expires, the stock price drops to a minimum of only $5 per share, then your profit is $500...
Overall, this is still a relatively healthy investment mechanism, unlike the products designed by those guys on Wall Street that almost killed themselves.
Simply put, short selling is relatively conducive to the stable operation of the stock market.
Our A-shares, because they cannot be shorted, are actually equivalent to always going long. Brokerage firms, listed companies, and regulators all hope that the stock price and stock index will get higher and higher.
Because short selling is not allowed, the only way for everyone to make a profit is to cash out at a high price, but if the cashing out at a certain price forms a scale or causes a greater impact, this may cause the stock price to plummet...
Of course, we do not allow short selling at present, and it should be said that there are indeed big and correct concerns.
First of all, the risk of short selling is very high, and it can be said that there is no upper limit.
Still for that $10 stock, your biggest profit is that its stock price drops to $0,1000.
But your loss, relatively speaking, has no upper limit, because its stock price may rise to $20, $200, or more, then you may lose $1,000, $19,000, or more..., there is no upper limit.
Secondly, our stock market is relatively opaque and unregulated, which makes it easy for all kinds of irregular and malicious short selling to occur.
Even the relatively regulated and transparent US stock market is prone to such behavior. For example, when investors are optimistic about Tesla, if you buy a Tesla car and let it catch fire on the street, it will inevitably affect its stock price.
Of course, in a place like the United States, such a simple and crude short selling method is a dead end, but the one designed by Director Yang, which is to influence the fluctuation of the stock price of Feng Yiping's listed companies by smearing Feng Yiping, is a reasonable short selling method.
It is difficult for regulators to catch evidence of his illegality.
Mr. Wang saw the one-sided public opinion on the Internet before. Just because Feng Yiping was blackened, he thought that the stocks of the listed companies acquired by Feng Yiping in the United States, Coin Star and Netflix, would fall by more than 5% at least on the first day.
This time, the amount they shorted was 20 million US dollars, which means that 1 million US dollars were received on the first day, which can be said to be quite good.
But unfortunately, as of yesterday's closing, the stock prices of the two stocks did fall slightly, but only by 1.13% and 1.25%, which is really, really disappointing. Maybe they will rise again when the market opens today.
"Is there any way?" Mr. Wang asked Lao Chen anxiously.
He didn't really want to make much money from this, but mainly wanted to defeat Feng Yiping once.
"The United States also suggested that we could join forces with other institutions," Lao Chen whispered.
Outside, the wind suddenly became stronger...