"Okay,"
Qu Zecai responded.
He then instructed the traders to continue shorting GBP standard contracts and the GBP exchange rate.
At this time, with the entry of numerous investment institutions and the shift in expectations among many investors in the foreign exchange financial market regarding the GBP exchange rate, the GBP exchange rate had risen from 1.468, where Su Yi first instructed traders to establish positions, to 1.482.
Based on this GBP exchange rate.
Their first-stage short position of 35 million US dollars had already lost over 20 million US dollars.
However, Su Yi was not overly concerned about this 20 million US dollar holding loss.
Before the "Brexit Referendum" event erupted, as funds were gradually invested and positions built, he hoped the GBP exchange rate would rebound as high as possible.
This way, he could lure more long funds in for a kill.
And also, to seize sufficiently generous profits from this 'black swan' event.
After all, the foreign exchange financial market is different from the stock trading market; it is somewhat similar to the futures trading market, where whether you go long or short, you need a corresponding counterparty.
"Mr. Su, our affiliated trading account opened with 'Forex.com International' is asking us to deposit an additional 50 million US dollars as margin,"
Wang Huaijin walked in and said as Su Yi was gazing at the changes in the GBP exchange rate.
"They stated that our holding risk is high, and if we don't supplement the margin, their risk control system will restrict us from opening further positions."
Su Yi frowned upon hearing Wang Huaijin's words.
He had injected 100 million US dollars into the 'Forex.com International' trading platform.
Currently, although the holding account had lost over 20 million US dollars, there was still 40 million US dollars in margin in the account to cover subsequent account fluctuations and losses.
At this time, the other party demanded an additional 50 million US dollars in margin.
This made Su Yi very unhappy.
However, at this point, he had already opened so many short positions on 'Forex.com International', and the entire plan had progressed to the second stage.
At this time, closing positions, withdrawing funds, and switching platforms was no longer appropriate.
So, despite his displeasure, he could only inject an additional 50 million US dollars into the 'Forex.com International' affiliated trading account.
Afterward, Su Yi considered the extreme short squeeze actions that longs might take during GBP exchange rate fluctuations.
He then concentrated his original plan of opening positions in 7 affiliated trading platform accounts into 3 trading platforms.
Thus, in addition to the 'Forex.com International' trading platform.
The affiliated accounts of the other two foreign exchange trading platforms, 'UBS International' and 'Yingxiu Finance', were each injected with 150 million US dollars by Su Yi, while the remaining 250 million US dollars were used by Su Yi as reserve funds and not injected into the respective affiliated trading accounts.
Once the funds were concentrated...
The company's trading team continuously increased their GBP short positions according to Su Yi's instructions.
On Monday, May 23rd, the total GBP short position of the 'Huayi Chengyuan No. 1' fund product reached 50 million US dollars, and at this time, the GBP exchange rate had broken above 1.486.
On Tuesday, May 25th, the GBP short position of the 'Huayi Chengyuan No. 1' fund product reached 70 million US dollars.
At this time, the GBP exchange rate reached 1.488, about to break through the 1.49 mark.
Furthermore, at this time, the British government announced some favorable economic stimulus measures.
Also, the Federal Reserve's pause in interest rate hikes and the Bank of England's continuous market operations.
All contributed to the GBP exchange rate steadily rising, accelerating the shift in GBP exchange rate expectations even further, and prompting more and more speculative institutions to enter the market and go long.
On Friday, May 27th, the 'Huayi Chengyuan No. 1' fund product's short position in GBP broke through to a scale of 80 million US dollars, and at this time, the GBP exchange rate officially broke through to 1.49.
At this very moment.
Su Yi's 35 million US dollar short position arranged on the 'Forex.com International' trading platform had already incurred losses exceeding 40 million US dollars.
And the 'Huayi Chengyuan No. 1' fund product's total holding of 80 million US dollars.
The total loss had reached as high as 60 million US dollars.
Facing the fund product's massive GBP short position and the enormous loss of up to 60 million US dollars.
Qu Zecai, the trading team manager, gazed at the main control computer interface summarizing the holdings of all affiliated fund accounts, his nerves constantly taut, always feeling immense pressure.
"Mr. Su, if the GBP exchange rate continues to break higher, our holding losses will rapidly expand,"
seeing that the upward trend of the GBP exchange rate showed no signs of stopping, Qu Zecai hesitated for a moment but couldn't help but remind him,
"The pressure of 100 times leverage is really too great. In this situation... we're afraid we don't dare to add more positions."
Su Yi's eyes remained sharp as he stared at the heavily losing holding account.
There was no tension on his face.
He gently patted Qu Zecai's shoulder and said,
"Manager Qu, don't be nervous. It's just a 60 million US dollar loss; we can handle it."
"Mr. Su... still wants to increase positions?"
Qu Zecai was surprised, hearing Su Yi's implication.
Su Yi nodded slightly:
"The plan has only just begun. The grand curtain of shorting GBP has just been drawn. The so-called 'lure the enemy deep'... during the GBP exchange rate's rise from 1.46 to 1.49, our invested capital loss is only 60 million US dollars, which has already exceeded my expectations.
Subsequently, we will certainly continue to increase our positions. But..."
Su Yi paused, then continued,
"The pace should be controlled slightly."
"How does Mr. Su plan to control the pace?"
Qu Zecai asked.
Their total capital was only 700 million US dollars, and now 80 million US dollars have been invested, plus over 60 million US dollars in holding losses.
Although it seemed there was still over 500 million US dollars in available funds.
Under 100 times leverage, once the GBP exchange rate accelerates its upward breakthrough.
The margin requirements for holdings will expand exponentially, and these 500 million US dollars might not last long.
Su Yi smiled and did not answer directly.
Instead, he called Wang Huaijin and instructed,
"Mr. Wang, the plan has reached this point; it's your turn again. Like last time... use unofficial channels to reveal our current predicament to other institutions, attracting more institutions to go long."
"Mr. Su, this..."
Wang Huaijin exclaimed,
"This will exacerbate our holding predicament, won't it?"
Su Yi said,
"You can't catch a wolf without sacrificing a child. What I want is for them to continue a short squeeze. I want to expose our predicament, attract more wolves, and thereby push the GBP exchange rate up another notch, allowing us to maximize short positions at a high level where longs are concentrated."
"But once the GBP exchange rate breaks through the 1.5 mark... We might not be able to withstand it!"
Qu Zecai worried.
"It's fine. Manager Qu, you operate according to my plan and trading instructions. Manager Wang, you act as I've entrusted you. While the news of our institution quickly ferments in the market and various institutions continue to enter, I'll go back to the mainland before GBP breaks the 1.5 exchange rate mark."
Su Yi said.
"Is Mr. Su returning to the mainland to raise more funds?"
Wang Huaijin guessed Su Yi's purpose and asked.
Su Yi replied,
"That is indeed the purpose, and my itinerary doesn't need to be hidden. The more people who know, the better. This way... many interested parties inside and outside the market will feel that we are meat on the chopping block, ready to be slaughtered at will."
"But in this situation, who would lend us money? Whether it's the business owners who trust Mr. Su or domestic financial institutions, they are basically fair-weather friends, only offering help when things are good and withdrawing it when things are tough. Everyone only adds icing to the cake, they definitely won't offer help in times of need."
Qu Zecai said.
"No matter. This is just a play to entice the longs to squeeze us."
Su Yi said.
According to Su Yi's past memories.
He knew that historically, the GBP exchange rate had never broken the 1.6 mark in the month before the 'Brexit Referendum' event erupted.
In other words, according to historical trends.
The GBP exchange rate had at most another 1000 basis points to rise.
And with their current position size, exhausting the subsequent 500 million US dollars in margin would be enough to hold until the GBP exchange rate broke through the 1.6 mark.
So, for Su Yi.
Whether he could ultimately raise the money was no longer very important.
"Oh, and one more thing..."
Su Yi thought for a moment and reminded Wang Huaijin,
"When revealing the news, state that our institution's available investment capital is only 450 million US dollars. This way... when we show that we dare not rashly increase positions, our holding losses continue to expand, our capital chain is tight, and we have no more capacity to continuously supplement margin, other institutions will confidently and boldly enter to short squeeze and go long, encircling us without any worries."
"Okay,"
Wang Huaijin nodded, keeping Su Yi's instructions in mind.
After Su Yi finished instructing the two, he had Lin Xiaoxiao book him a flight back to Modu.
Conveniently, the next two days were the weekend, and global financial markets were closed, giving him enough time to raise funds and plan the subsequent steps.
After returning to Modu...
Su Yi first went home to see his parents and Chu Wan.
Then, through the network of contacts he had previously established, he expressed his intention to raise funds.
As Su Yi expressed his intention to raise funds, through Wang Huaijin's arrangements, a series of news regarding Su Yi's 'Huayi Chengyuan No. 1' hedge fund being deeply mired in shorting GBP, suffering huge holding losses, being heavily short-squeezed by international capital, and facing a liquidation situation, also spread rampantly everywhere, circulating throughout the financial circles of Hong Kong City and domestic financial circles.
Of course, it also attracted the attention of many business owners in the domestic business community.
"Sorry, Mr. Su, my company's capital chain is also a bit tight right now, so I really can't help!"
A Modu entrepreneur, who had previously sworn with conviction to help Su Yi with anything he needed when subscribing to the 'Huayi Yuanzheng No. 1' fund product, chuckled twice and refused Su Yi's request, saying,
"How about... Mr. Su tries Mr. Wang? He should have some idle funds."
"No need. I appreciate Mr. Hu's kindness."
Su Yi smiled.
"Brother Su, I support you."
Unlike Mr. Hu's refusal, Lin Minghui laughed heartily and said magnanimously,
"I don't have the courage to gamble billions on the GBP exchange rate, but if Brother Su dares to do this... then I will definitely support you wholeheartedly. I'll provide you with 80 million in funds. If it really gets liquidated, consider this 80 million my unconditional support to you; you don't need to repay it."
"Mr. Lin is indeed generous,"
Su Yi said with a smile, feeling a little moved.
He had made a round, and Lin Minghui was the first to proactively lend him money, which showed... he hadn't befriended him in vain.
"It will definitely be repaid. Mr. Lin's 80 million funds, invested in the foreign exchange market through my hands, the profits belong to Mr. Lin, and any losses are mine."
Su Yi said with a smile.
"Haha... Brother Su, you're being too polite,"
Lin Minghui laughed.
And following Lin Minghui...
In the days that followed, Fang Xingyuan also proactively provided 100 million in funds.
The others, Xu Qiao, Old Zhang, Old Wu, and Brother Chen, four friends from the 'Modu Ultra-Short Group' speculative capital main force group, each provided 10 million in funds.
In two days, Su Yi raised a total of 240 million in funds from his friends through his connections.
Then, through Fu Guoxiang, the general manager of 'Huaxin Securities Financial Street Fuxing Road' branch, he further raised 200 million in funds from several major state-owned bank institutions, using the fixed management fee income of the 'Huayi Yuanzheng No. 1' fund product as collateral.
By this point...
After two days of effort, he had raised a total of 440 million in funds.
Such a sum of money seemed massive.
But converted into US dollars, under the 100x leverage of an 80 million US dollar position, it actually couldn't play a decisive role.
After all, with this amount of capital.
As long as the GBP exchange rate jumped up by more than 200 basis points, it would be instantly wiped out.
But fortunately, having something is better than nothing.
Moreover, this fundraising effort also helped Su Yi to clearly see which relationships could be utilized in the future and which were illusory.
It made him realize who he could befriend and who he couldn't.
"Su Yi... have you returned to Hong Kong City?"
On May 29th, when Su Yi flew back to Hong Kong City and had just landed, Fang Wanqing called.
Su Yi didn't expect her to call him at this time.
He was momentarily stunned, then answered and said,
"Just arrived in Hong Kong City. Miss Fang, is there... something urgent?"
"I heard about your situation. I know you're very short on money right now, and I can help you."
Fang Wanqing said.
"You can help me?"
Su Yi was surprised.
"Mm."
Fang Wanqing nodded and quickly named a place, asking Su Yi to go there to meet her.
Su Yi thought for a moment and still went to the appointed place according to the address she gave.
"This is my aunt,"
Su Yi had just met Fang Wanqing when the latter hastily introduced a middle-aged noblewoman beside her,
"A director of 'Huifeng Bank'. She has some connections with my aunt. My aunt said she is willing to guarantee you and should be able to lend at least 30 million US dollars from 'Huifeng Bank', right, Auntie?"
Saying this, Fang Wanqing quickly turned her head to look at the middle-aged noblewoman, giving her a wink.
"Oh, you girl, what Auntie promised you, she naturally won't go back on it,"
the middle-aged noblewoman said, sizing Su Yi up and down a few times, seemingly quite satisfied, and continued,
"However, young man, this money is guaranteed by Fang, not by me. I don't ask when you'll return it, but you must always remember her kindness in your heart."
(End of Chapter)