My Fintech Empire

The current situation is that if short sellers want to continue to resist, they will need to borrow RMB to increase margin or continue selling. However, at this time, the country has tightened the supply of RMB and prohibited institutions from lending RMB.

At this moment, the overnight lending rate of RMB in Hong Kong has soared to about +69%. If short sellers borrow RMB at this cost, they will definitely lose money to the point of vomiting blood.

This +69% is the overnight lending rate, not the annual interest rate. In other words, if you borrow 100 million today, you will have to pay back 169 million tomorrow. Even Fang Hong cannot withstand such capital costs for many days.

If short positions are liquidated or they choose to close their positions and leave the market, they will have to buy RMB in the market, but this will further push up the RMB exchange rate, leading to more short positions being liquidated, and creating a situation where short capital can kill each other.

This situation is really a dilemma. It is neither to advance nor to retreat. To extend one's head is a knife, and to shrink one's head is also a knife.

The originally seemingly unbreakable army of short-selling alliances almost collapsed in the face of this wave of counterattacks from the stars and quickly fell apart.

At this moment, a situation of cannibalism is already unfolding. Even if you want to buy RMB from the market, you have to look at the face of Stars Capital and Fang Hong, because Stars Capital has almost bought out the RMB in the market.

Although there is still some RMB circulating in the market, compared with the current demand from so many shorts, it is a drop in the bucket unless Star Capital is willing to release some RMB.

But is this possible?

Obviously it was absolutely impossible. After finally burying them, Fang Hong had no intention of letting them go, especially those who were inside, and they were all killed and left here.

The overnight lending rate hasn't doubled yet, so where are we?

The stars are now sitting firmly on the Diaoyutai, watching the short sellers kill each other. They are not anxious at all. All the people in the net are already fish on the chopping board, ready to be slaughtered by others.

…

At 15:00 sharp, the stock market closed as scheduled.

The three major stock indexes all plummeted and closed today. They all had a big negative line. The closing price was the lowest price of the whole day, indicating that it closed before it fell completely. It also hit a new low since the beginning of the year.

The Shanghai Stock Exchange Index plummeted -5.33%, closing at 3016.70 points, with a turnover of 286.4 billion; the Shenzhen Component Index plummeted -6.21%, closing at 10212.46 points, with a turnover of 377.8 billion; the NSE 50 Index plummeted -5.45%, closing at 846.15 points, with a turnover 81.1 billion, and the total turnover of the three major markets was 745.3 billion.

Big A seems to be starting a 3,000-point defense battle again.

On the other hand, the offshore exchange rate market closed today, and the RMB against the US dollar rose to 6.5858, a full 1,200 basis points higher than the lowest point during the day. This daily K-line basically raised the offshore exchange rate to the level before the short sellers launched their attack.

In other words, the positions that the short sellers have gained these days basically lost everything today.

…

The next day, Tuesday, January 12th.

Today's offshore RMB exchange rate has not soared again, and Fang Hong has no intention of doing so. It is not a good thing for the foreign exchange market to fluctuate sharply in the short term. To say the least, short sellers may also hedge against it.

Today's exchange rate only appreciated to 6.5781, with an overall appreciation of less than 80 basis points.

But at the same time, the overnight RMB lending rate in Hong Kong soared by +35.50% today. Adding yesterday's increase is a cumulative increase of +129%, setting a new high since the quotation was made.

Those opportunistic speculators who repeatedly jumped offshore and onshore and some people who took advantage of the situation have now lost money to the point of vomiting blood, and positions are being liquidated and liquidated in turn.

International short capital is also making full efforts to counterattack, but Fang Hong doesn't care, because his capital cost has an absolutely overwhelming advantage, which means that time is on his side, if he takes a small step forward, his opponent will You have to pay ten times the price to barely get it back.

In the face of such a situation, as long as Fang Hong holds on, the power of the short sellers will become weaker day by day. Then he will wait for the right time and the autumn wind will sweep away the fallen leaves and win easily.

As for now, let's clean up the gang of people who are stealing things from others, one by one, don't even think about running away.

…

"This guy surnamed Fang is so ruthless! He wants to torture people to death and bankrupt them..." The private equity trader who fled yesterday was still frightened at this moment. He looked at The overnight interest rate soared to +129%, which is even more frightening.

He knew very well that if he ran a little slowly yesterday, he would be gone today.

It’s no wonder that he still feels scared now, because the investors in his capital base are basically rich and powerful people, and they are not ordinary citizens. If he really wants to liquidate his position, he will have no choice but to go to the rooftop to apologize. .

Even if he escaped this disaster, it almost cost him half his life. His capital went from a huge profit of +179% to a huge loss of -36.7%. It only took one day. Not only did he lose all the profits from this year's short orders. Go, even last year I gave up a lot of votes to save my life.

It was a good thing that he could save a life, because some people's lives were lost. In the past 48 hours, he had already learned some news in the circle privately, and the funds of more than a dozen of his peers had been Confirming the liquidation, the actual situation is definitely more than this number, and some people have already gone to the rooftop and jumped directly to commit suicide.

Such a terrifying overnight lending rate has been maintained for two days. The most terrible thing is that it is not known how long such an exaggerated overnight lending rate will last.

One day's interest cost more than doubles, who can withstand this?

There are also some who are forced to cut off their positions in Big A to raise margins. What is really fatal is the loss of their positions. This is the biggest factor that really triggers the trader's hand.

Generally speaking, in addition to the margin, investors' assets also have other remaining funds. A liquidation means that the loss is greater than the margin in the account. The remaining funds after liquidation by the company are the total funds minus the investor's loss, which is the margin. If all the losses are incurred, a margin call must be made at this time to avoid forced liquidation.

A shortfall is when the investor's equity becomes negative. Not only does the investor lose all funds, but he or she also owes money to the financial company. If the shortfall is not filled in time, legal liability will be pursued.

The financial institution's methods are not guaranteed. Are you joking and asking them to pay the bill for you?

Because of this, some traders choose to take the "shortcut" route and go directly to the rooftop to save trouble and get it over with.

This also explains to a certain extent why, despite the violent appreciation of the RMB in the foreign exchange market yesterday, Big A experienced an accelerated plunge. This is because there are people cutting meat in the stock market to fill holes in the foreign exchange market, and not just one or two.

The current situation is that those short funds that have been trapped in the market are unable to leave even if they want to, and have to continue to invest to fill the hole.

If they want to close their positions, they have to buy RMB from the market. The problem is that there are not so many RMB now, and almost all the RMB balance in the offshore market is in the hands of the Qunxing family.

Without the RMB, the position cannot be closed, and the overnight lending rate is more than double the daily capital cost. If it takes a day, you will have to shed a layer of skin. Even if you have a gold mountain, you cannot bear such consumption.

Some of them were highly leveraged and exploded yesterday.

"This is simply a ruthless massacre of capital. This Fang Hong is so terrible. Yesterday's decision may be my wisest decision this year..." At this moment, the trader feels really scared every time he thinks about it. Compared with his peers on the rooftop, He felt more and more that he was so lucky. If he had been slower, he would have rushed to the rooftop to queue up.

…