Rebirth of the Capital Legend

Chapter 270 International capital institutions turn from long to short!
"I told you, all declines are meant to lure short sellers."

Seeing the trend of the pound exchange rate, quickly repairing the 1.5350 mark and continuing to break upward, in the trading room of Tianhe Capital in Hong Kong City, Gu Chijiang, who had been tense for most of the day, finally relaxed slowly and continued with a smile: "The power of market trends is extremely strong. With the Bank of England conducting open market operations and the Fed's expected rate hike being postponed, there is only one way for the pound exchange rate to go, and that is to continue to rise.

In the face of the power of trends...

No matter how the main short-selling institutions in the market counterattack, they should not be able to change the market trend of the pound exchange rate.

I really don't understand. The exchange rate is clearly trending upward, so why would Huayin International enter the market and go long at this time to support Huayi Capital?"

"I heard it was probably because of the Fang family." Xie Hongxing, manager of Tianhe Capital's trading team, responded to Gu Chijiang's sigh, "Two days ago, I heard that Mr. Zhang Yanshun, general manager of Huayin International's asset management business, met privately with Mr. Su from Huayi Capital, but no one knows what they talked about."

"Is this true?" Gu Chijiang asked in surprise.

Xie Hongxing nodded and said, "Many people saw it at the entrance of the Tianlai Hotel that day. It seems that Ms. Li from the Huo family was also there with him."

"No wonder." Gu Chijiang said with a smile, "I was wondering why Huayin International, a state-owned institution, would suddenly intervene in the pound exchange rate market. It turns out that the Fang and Huo families are behind this. Mr. Su from Huayi Capital has considerable power."

"Indeed." Xie Hongxing said, "It's not easy to get Huayin International to come in and rescue us."

Gu Chijiang nodded slightly and said, "It seems that the Fang family is really going to put their money on this young man named Su. This is really a big gamble!"

"That's right." Xie Hongxing responded, paused, and then said, "However, at this time, the bulls still have an absolute overwhelming advantage in the pound exchange rate market, and the short-term short position holders who have suffered heavy losses in the market will definitely continue to stop losses and close their positions when the pound exchange rate rises again and the trend becomes clearer and clearer. In other words... in the subsequent trend, it can be expected that the pound exchange rate will become stronger and stronger.

In the overall situation where the bulls are fully suppressed and the bears are gradually collapsing.

I feel that even if Huayin International invests a large amount of money in short selling and provides Huayi Capital with a new credit line to prevent Huayi Capital from going bankrupt, it is unlikely to reverse the trend of the pound exchange rate in the future.”

"This is beyond doubt." Gu Chijiang said, "In the current pound exchange rate market, the main long institutions include 'Huifeng Global Asset Management', 'Pacific Capital', 'Barclays Bank Foreign Exchange Trading Department', 'Vanguard Capital', 'UBS Capital International', 'Nomura Bank Investment Department', 'Blackstone Global Asset Management Center Foreign Exchange Investment Department', 'Van Lego Hedge Fund', 'Hashimoto Asset' and other global core asset management institutions.

What's more important is that the Bank of England is going long behind the scenes to support the pound exchange rate.

Even Frederick, the main hedge fund of 'Aberdeen Asset Evolution 1', who controls tens of billions of dollars, cannot reverse the trend of the market.

Even if Huayin International intervenes in the market, it cannot change anything.

Moreover, according to my guess, even if Huayin International wants to enter the market to go long, it will not invest too much money.

After all, the investment risk is extremely high.

A young man from Huayi Capital simply doesn’t have the weight to make state-owned institutions invest huge amounts of money in a gamble.”

"I think so too," Xie Hongxing said. "I feel that in this battle between long and short positions in the pound exchange rate, Huayi Capital and President Su are really going to be ruined. And the Fang family... this gamble is likely to fail, but the Fang family has a strong foundation, so they won't suffer much loss."

"It's not just a matter of losing reputation." Gu Chijiang said, "I'm afraid that after this battle, the institution 'Hua Yi Capital' will no longer exist. If Mr. Su doesn't stop loss and exit immediately, more and more long forces will continue to squeeze out. Once short institutions are eager to exit and there is an internal stampede, it will inevitably cause the pound exchange rate to fluctuate extremely upward. At that time... the main fund 'Hua Yi Cheng Yuan No. 1' headed by Mr. Su will really have no choice but to go bankrupt."

Xie Hongxing nodded and said, "But this is a great opportunity for us to reap huge profits."

Gu Chijiang smiled and said, "Of course. Since the pound exchange rate has rebounded sharply after the short-selling counterattack, it is estimated that it will not fall sharply again. Let's use our current account profit to continue to increase our positions and go long. I feel that the entry of Huayin International is very likely to... not only will it not stimulate the market to follow suit and short, but will instead cause the major long institutions in the market to force a more aggressive short squeeze."

"Why do you think so, Mr. Gu?" Xie Hongxing asked.

Gu Chijiang said: "Foreign institutions have always regarded Chinese institutions as fat sheep in the international financial market, and their main target is to besiege and hunt state-owned institutions. Now that Huayin International has taken the initiative to enter the market, it is like a sheep among wolves, falling into a short-selling trap.

In addition, Huayin International holds huge capital power.

In the pound exchange rate market, a number of foreign institutions that are long on the market, wanting to obtain more huge profits, will inevitably induce Huayin International to continue opening positions and investing funds.

The short position power held by Huayi Capital.

For these international capital giants, this may not be enough to feed them.

Now, the entry of Huayin International is exactly what they want.”

"That's true." Xie Hongxing pondered for a moment and nodded, "But this doesn't have much to do with us. Anyway, we just need to follow the trend and continue to go long."

"It can't be said that there is no relationship." Gu Chijiang's eyes showed a strong greedy look, and he said, "At least the entry of Huayin International will lead to an increasing probability of an extreme bull market in the pound exchange rate market, and the opportunity for us to grab huge profits in the market is increasing."

Along with the discussion between the two, they continued to increase their long positions.

Pound sterling exchange rate market.

As trading hours continued, its exchange rate continued to rise, gradually crossing the 1.5360 and 1.5370 levels.

Moreover, as the pound exchange rate trended, it regained its strength and recovered its decline.

In China, there are many retail investors, speculators, and market hot money groups who had previously followed Su Yi to short the pound exchange rate and are holding their positions to this day.

At this time, my confidence in holding positions began to waver again.

"Fuck! All the losses in the Asian session were recovered so quickly. The trend of the pound exchange rate... It feels like it won't fall at all. Sigh... My account is about to turn from profit to loss. Should I take this opportunity to stop loss?"

Someone asked this question on an online forum where domestic foreign exchange investors gather.

"Anyway, I have stopped my losses. I can't see any signs of a bearish trend in the pound exchange rate. Instead, the bulls have been squeezing out shorts."

"It seems that Mr. Su is going to fail with his resolute bearish view and short position!"

"I am getting more and more confused. If Mr. Su is wrong to be bearish on the pound exchange rate, then why would Huayin International publicly support Mr. Su's Huayi Capital and be willing to grant him new credit lines at this time? And... why would Huayin International enter the market and short sell and establish a short position?"

"The entry of Huayin International does seem very strange."

"It's not just Huayin International. Aberdeen Asset Management is also continuing to increase its short positions in the pound."

"Looking at the information of the entire market, the main short positions are currently being reduced by the floating retail investors rather than the major institutions in the market."

"In general, the volume of long and short positions in the pound exchange rate market is increasing, right?"

"That's right. Both long and short positions are on a continuous increase. However... it is obvious that the increase rate of long positions is still much faster than that of short positions. As for the current on-site open positions... the long positions are approaching 300 million lots." "This long and short position volume is really terrifying."

"Everyone is betting on the result of the referendum on June 6. The bears are betting, and the bulls are also betting."

"The bulls are not only betting on the referendum result on June 6, but are also forcing the main fund 'Hua Yi Cheng Yuan No. 23' headed by President Su to stop losses on a large scale, thus triggering an internal stampede among the short-selling institutions."

"Is this possible? I feel that President Su will not easily cut his losses and leave the market before the referendum results come out on June 6."

"I feel the same way, but the referendum result on June 6 should not be surprising, right? Isn't the 'Brexit referendum' just a farce? No matter how you look at it... there is no way the UK will really leave the EU."

"Before the results come out, who knows if there will be any surprises?"

"I still choose to take a gamble with President Su and trust President Su's choice."

"I also believe in Mr. Su. I think Mr. Su will not admit defeat easily, let alone cut his position and stop loss easily. The battle between long and short positions in the pound exchange rate market is getting more and more exciting."

"Boss Su is not afraid of billions of funds, so what should I be afraid of?"

"However, the longs in the pound exchange rate market are really strong. If the short-selling institutions led by President Su do not make a strong counterattack, I am afraid they will not be able to survive until the referendum day on June 6."

“It feels like the closer we get to June 6, the more intense the short squeeze will be.”

"Before the long and short forces in the market are completely determined, it is estimated that the fluctuations in the pound exchange rate will become extremely drastic during this period."

"With such a large number of long and short positions, it is impossible for the market not to be volatile."

As many domestic investors and speculators continue to discuss...

When the foreign exchange market further shifted to the US trading session, the trend of the British pound exchange rate showed obvious changes again.

The British pound exchange rate broke through to around 1.5400 without any hindrance.

At around 10 pm China time, which was the beginning of the U.S. trading session, the market suddenly took a sharp turn for the worse, and in less than half an hour, it fell back to around 1.5340.

At the same time, during this half hour.

The number of new short positions in the pound exchange rate market also increased rapidly.

"What...what's going on?"

Noticing that the pound exchange rate continued to plummet by 60 points in half an hour, in the trading room of 'Vanguard Capital Amanda Hedge Fund' on Wall Street in New York, USA, fund manager Cedric frowned instantly and quickly turned his attention to the researcher of the Market Information Department.

Bella, a researcher at the Market Information Department, immediately responded: "There is no unusual news, and I don't know what's going on."

"It feels like some major institution in the market is concentrating on increasing its short positions, or in other words, it is concentrating on covering and closing long positions." Caroline, a trader at Amanda Hedge Fund, said, "I just don't know which major institution in the market it is and what is the motive?"

"No need to guess." While Carolyn was guessing, Guy, the head of hedge fund asset management business, walked into the trading room and told him the latest news. "According to internal information, the fund products managed by Humphrey, the market hedge fund manager of the Blackstone Group, are aggressively increasing their short positions on the pound exchange rate."

"'Blackstone Group'?" Cedric asked in surprise. "Didn't they just release a market research report that was bullish on the British pound exchange rate?"

"Humphrey's...swings in the financial market are beyond common sense." Guy said, "I think many people didn't expect that Blackstone Group would turn from long to short."

"No wonder the exchange rate of the pound fluctuates so extremely." Cedric said suddenly.

Guy responded: "It doesn't matter. As long as the underlying logic and overall market expectations remain the same, Blackstone's change from long to short will not have much impact on the market trend. Currently, the net long position in the entire pound exchange rate market is still relatively large, and it is difficult for short sellers to do much."

Unexpectedly...

He had just finished speaking.

The exchange rate of the British pound showed a further downward trend.

Moreover, as the subsequent trading time progressed, in the following US trading session, the short-selling forces on the market actually gained a sustained advantage, pushing the pound exchange rate down step by step to around 1.5300 points again.

Finally, when time once again turns to the Asian plate stage on Friday, June 6.

After a whole day of violent fluctuations, the pound sterling exchange rate has returned to its position at the beginning of yesterday's Asian trading session.

This was somewhat surprising to Su Yi and other core short-selling institutions in the market, including Huayin International and Aberdeen Asset Evolution No. 1, which were linked to the main hedge fund "Huayi Chengyuan No. 1" under his management.

"Boss Su, according to market news, Blackstone Group and Citibank have cleared their long positions in the British pound exchange rate, and the strategic analysts of the two institutions have begun to bearish on the British pound exchange rate." At 9:40 in the morning, in the internal trading room of Huayi Capital in Hong Kong, Qu Zecai said excitedly, "This shows that the short position in the British pound exchange rate market is increasing. Next... it may not be as easy as before for the bulls to force a short position aggressively."

Su Yi responded with a smile: "The sudden change of direction of Blackstone Group and Citibank is indeed somewhat surprising, but I have said before that in the international financial market, as long as there is profit motivation, there will be no shortage of smart money. As the market trading time goes by... just wait and see, more and more smart money will realize the risk of a sharp drop in the pound exchange rate."

"But at the same time, the market's unclosed long positions are still continuing to increase." Qu Zecai paused and continued.

Su Yi nodded and said, "This is expected. After all, the current market's superficial expectations... are still biased towards the bulls. However... since large institutional capital such as Blackstone Group, Citibank, and Bank of New York Mellon have begun to realize the risk of a sharp drop in the pound exchange rate and have begun to intervene in the market on a large scale and establish short positions, then our opportunity and timing for counterattack has clearly arrived."

At this point, Su Yi quickly contacted the two asset management managers from Huayin International's Investment Departments 1 and 2.

There is also Frederick from the main fund trading room of 'Aberdeen Asset Evolution 1'.

"Everyone, the accumulation of long positions in the current pound exchange rate market has become extremely large, and the number of net long positions has accumulated to a scale of one million lots." Su Yi's eyes were sharp and he smiled. "In addition, more and more major institutions have switched from long to short, and more and more OTC institutions have intervened in the market to short. I think... the time has come for us to further increase our positions, suppress the current profit margins of the longs, and their confidence in holding positions, and force the longs in the market to cover their positions, or force the main longs in the market to further increase their positions to stabilize the pound exchange rate."

"You want to take advantage of the opportunity when institutions increase their holdings or establish short positions to continue to invest a large amount of funds to increase their positions, further suppress the trend of the pound exchange rate, cause the confidence of the bulls in the market to collapse, and at the same time induce the main bulls to further cover their positions?" Frederick said with a smile, "The previous operation was to lure more bulls, and now this one... what is it called?"

Su Yi responded with a smile: "Now this is called biting the main bulls in the market, forcing them to continue to invest funds to gamble with us with the spirit of a head-on decisive battle."

"It seems... the real battle between bulls and bears has just begun!"

Hearing Su Yi's plan, Meng Shengfei, manager of Huayin International's second investment department, had excitement and excitement in his eyes, but also a bit of nervousness and uneasiness, and he smiled and sighed.

(End of this chapter)