Rebirth of the Capital Legend

Chapter 283 The unexpected short-selling force!
"Haha, what did I say? All the declines are just the death struggle of the shorts in the market."

Seeing that the pound exchange rate returned to the 1.5300 mark, in the trading room of the hedge fund trading department of "Huifeng Huanyu" in Hong Kong, Godfrey's face was already filled with a big smile.

"Mr. Godfrey's judgment on the trend of the pound exchange rate market is indeed accurate." Gu Chijiang of Tianhe Capital praised with a smile, "The number of open long positions in the market has now exceeded 430 million lots, which shows that during this period, there are still large financial institutions in the market that continue to increase their long positions. It seems that Mr. Godfrey's previous statement about the Bank of England's plan to snipe Wall Street short capital is indeed true."

The British pound exchange rate successfully broke through the 1.5300 mark.

At the same time, looking at the huge long positions held by his fund, which once again entered the stage of full floating profit, the pressure on him was instantly reduced and he felt a lot more relaxed.

It’s just a pity that I was unable to continue increasing long positions below 1.5200.

This made him feel that something was missing.

"After entering the European session, the trend of the pound exchange rate has been significantly stronger than in the previous Asian session." Sato of Mitsui Yoshitomo Investment Co., Ltd. also said at this time, "and the rate of increase in long positions in the market is also much faster than before. It seems that... the Bank of England has already started to take action."

"This time the pound sterling exchange rate has broken through the 1.5300 mark, and it should not fall back." Godfrey's eyes were sharp, and his gaze was still fixed on the rapidly changing pound sterling exchange rate. "I said it before... Goldman Sachs's bullish reversal to bearish can only affect the market's short-term sentiment, but cannot change the market's own trend."

"With the current trend of the pound exchange rate..." Gu Chijiang said with a smile, "the short-selling major institutions in the market will probably be in big trouble next."

Sato laughed and said, "To be honest, I'm just waiting for this group of short-selling main institutions to trample on us."

"In order to make the main short-selling institutions in the market step on each other to stop losses, I am afraid that the pound exchange rate needs to continue to break through the 1.5500 mark." Although Godfrey was in a good mood and the fund's long positions had a lot of floating profits, he did not lose his mind and remained very rational and calm. "However, once the 1.5300 mark is broken, especially the rapid rebound of the pound exchange rate from below 1.5200, it will definitely cause huge psychological pressure on the main long-selling institutions in the market. I estimate that at this position and under this trend... there are not many main short-selling institutions, as well as retail investors and hot money groups inside and outside the market, who are interested in continuing to increase their short positions. In other words... the higher the pound exchange rate goes, the lighter the market pressure it may encounter."

"It is certainly not easy to make Huayin International, Aberdeen Asset Management, BNY Mellon, Blackstone Group, Goldman Sachs Group, and other giant institutions with extremely strong financial strength trample on each other to stop losses, but..." Sato paused and continued with a smile, "With the strong rebound in the pound exchange rate, I don't think it is difficult to continue to guide market sentiment and cause the short-selling retail investors and hot money groups in the market who are not so confident in their positions to cut their positions and trample on each other.

The market's capital structure, as well as the long and short situations.

It never exists alone.

Once the confidence of the short-selling retail investors and hot money in the market began to collapse, they began to close their positions and cover their positions.

So, when the short-selling force in the market is sharply reduced while the long-selling force is still increasing rapidly, it will definitely affect the trading decisions and confidence of these large short-selling institutional groups.

Not to mention forcing them to stop losses and cover their positions.

At least it is very possible that they will not dare to continue to increase their short positions easily, thereby suppressing the market."

"It seems that the major short-selling institutions in the market are unlikely to be swayed by market sentiment," said Gu Chijiang. "The pound exchange rate has risen above 1.5400 before, but it did not cause any sway in the strategic decisions of the major short-selling institutions in the market."

Godfrey said: "It was different before. At the previous time point, the main short-selling institutions in the market were not panicked by the rapid rebound of the pound exchange rate. That was because there was still a long way to go before the referendum result was announced on the 23rd. They had sufficient strategies and methods to influence market sentiment and invested huge amounts of money to guide the market trend.

But now, there are less than two days left until the referendum on the 23rd.

Such unusual movements so close to the referendum.

It will create more imagination and more expectations for the vast number of investors in the market.

In other words, at this point in time, it will not be so easy for the main short-selling institutions in the market to use public opinion to guide market sentiment.

But if we cannot use public opinion to guide changes in market sentiment.

Even if huge amounts of money are invested, it would probably be difficult to reverse the market trend.

Moreover, the more consistent the market's bullish expectations are, the greater the risk of short selling.

Although these institutions claim to be making a big bet on the pound exchange rate and have already reserved tens of billions of dollars in funds, in fact... given the extremely high investment risks, they will hesitate and dare not go all in. "

"Mr. Godfrey is right," Sato responded, "Whether it's Wall Street, our Japanese financial groups, or Hong Kong's investment companies, when they make large investments in the foreign exchange market, they must have a risk control system.

If the market trend continues to develop in the opposite direction of expectations.

If market sentiment changes and expectations in the opposite direction continue to strengthen.

Whether it is a long position holding institution or a short position holding institution, they will fall into a very passive situation.

Therefore, if the pound sterling continues to rise and rebound, I believe that the short-selling capital institutions in the market will not dare to go against the trend on a large scale and continue to invest more huge amounts of money at high risk. "

"That is to say..." Gu Chijiang chuckled and said, "Are we really only one step away from defeating the main short-sellers in the market?"

Godfrey nodded and said, "That's about right."

"It all depends on the game between the Bank of England, a group of European capital, and Wall Street capital in the next European and US trading sessions." Sato said, "Although theoretically, the last psychological defense line of the main long institutions in the market should be around 1.5500 points, but I estimate... if the pound exchange rate can quickly break through 1.5400 points, it will be very close to the referendum day on the 23rd.

It will definitely cause panic among the short-sellers in the market.

It will also most likely cause the main short-selling institutions with higher holding costs in the market to be forced to reduce their positions and close their positions to stop losses.

As long as there are a small number of short-selling institutions in the market, their confidence will begin to collapse, and they will start to adjust their trading strategies and make operations to cover and close their positions.

Then, the domino effect of the overall collapse of short positions will definitely occur."

"Then can we take this opportunity to aggressively squeeze out the short position?" Gu Chijiang suggested with a smile.

Although the large number of long positions held by the fund have begun to make profits, he will definitely not be satisfied with this floating profit under the excellent opportunity of short squeeze.

Moreover, when the long positions held by the fund have some floating profits.

The financial pressure he faced was also much less, and he had more reserve funds available for operations and account liquidity.

"I think we can continue to squeeze out and increase long positions." Sato's view at this time is also very optimistic. He said, "The Bank of England and its government agencies dare to use a large amount of real money to invest in the market to snipe Wall Street short capital. This is enough to show that the referendum result on the 23rd is basically 100% the result of continuing to stay in the EU, and it also indirectly confirms our previous speculation.

That is, this round of Brexit referendum is a threat from the British government to the EU.

This is a farce deliberately created in order to obtain more preferential policies and benefits from the EU.

Moreover, this logic has been verified.

With the Bank of England's firm determination to maintain the stability of the market exchange rate, and in the foreseeable future, the direction of the UK economy and expectations for economic recovery will improve significantly.

The underlying logic behind the continued appreciation of the pound sterling exchange rate cannot be shaken at all.

In other words, from the underlying logic, regardless of whether the main short-selling institutions will step on the market, it will not change the upward trend of the pound exchange rate. "

"Mr. Sato's logical analysis is very brilliant." Godfrey nodded with a smile, his eyes becoming more and more excited, and he said excitedly, "This is really a feast for the eyes!"

After saying this, he turned his gaze back to the British pound exchange rate.

During the discussion and analysis among the three people, the pound exchange rate had already broken through 1.5330 and was still breaking upward.

At the same time, the number of open long positions in the market is still surging.

The number of open short positions, however, is decreasing sharply.

This shows that a large amount of new funds are forcing long positions, and there are also a large number of short position holders in the market who are quickly stopping losses and covering their positions.

Seeing this scene...

Godfrey no longer hesitated, his eyes fell directly on Gerald in the trading room, and asked him to command each trading team to quickly force short positions and continue to use the floating profits in the account to increase long positions.

And the moment he issued the trading order, the trading center of 'Mitsui Yoshitomo Investment Company' was linked with it.

There is also the main fund trading room of 'Tianhe Capital' headed by Gu Chijiang.

Also doing the same operation.

At the same time, in London, far across the ocean.

UBS International, Pacific Capital, Bank of England Foreign Exchange Trading Department, and other major hedge funds under Huifeng Bank are also investing heavily to increase their long positions on the British pound exchange rate.

“Oh my god, this is crazy… The open long positions in the market have exceeded 470 million.”

Seeing the pound sterling rebound wildly, hitting a new intraday high and rapidly approaching the 1.5350 mark, Angus, the risk control monitor at the risk control department office at the FXCM International headquarters in the Cayman Islands, was really shocked and hurriedly reported to Hubert, the manager of the risk control department: "Manager, judging from this situation, the open long positions of the pound sterling exchange rate are heading for a scale of 500 million lots."

"This unclosed long position is indeed a new record in the history of pound exchange rate trading," Hubert said with emotion. "Such a huge number of positions means that the active capital group in the entire global foreign exchange market has all squeezed into the pound exchange rate market."

"Not only that, I heard that the Bank of England has also begun to intervene in the market in a strong manner." Angus said.

Hubert exhaled and said, "With such a large position size, even if the Bank of England intervenes in the market strongly, it may be difficult to lead the change of market trend."

"Yeah, I think so too." Angus nodded. "In the pound exchange rate market, the increase in trading margin has not stopped the determination and ideas of various funds to make a move."

"Everyone knows that with such a huge accumulation of positions, there will definitely be an extreme market explosion and opportunities to make huge profits. As a group of speculators and investors with high investment risk appetite in foreign exchange transactions, how could everyone miss it?" Hubert said, "The referendum on the 23rd is really attracting worldwide attention, and the result of this referendum... without any surprises, will also determine the future fate of Britain, the former hegemon."

"It will also determine the fate of our company, right?" Angus thought for a moment and said.

Hearing Angus mention this, Hubert sighed helplessly and said, "Yes, it will also determine the fate of our company. The number of net long positions in the market has soared to the level of one million lots. If the referendum result on the 23rd is unexpected and extreme market conditions occur, and too many long accounts are liquidated, I am afraid that the history of last year's 'Swiss franc black swan' will be repeated, and the position scale this time will be larger. Once this unexpected extreme market condition occurs, our company will be pushed to the brink of bankruptcy in an instant."

"There shouldn't be any surprises, right?" Angus said. "It seems... after the Bank of England increased its market intervention, the short sellers have no chance."

"Who knows?" Hubert smiled. "No one can accurately predict history that has not yet happened."

After saying this, Hubert turned his attention to the pound exchange rate market.

However, we were surprised to find that after the pound exchange rate just touched around 1.5350, the bears actually launched an extremely strong counterattack against the trend.

The huge amount of short orders increased rapidly.

In an instant, it seemed that short positions worth nearly $10 billion were hitting the market.

Immediately afterwards, before many people could react.

Under the influence of this huge short position, the pound sterling exchange rate plummeted, crashed 50 points, and fell back below 1.5300 points.

"What the hell, what's going on, who is shorting?"

When the pound sterling exchange rate fell back below 1.5300 at lightning speed, such questions flashed through the minds of all long institutional managers, as well as countless long retail investors and hot money in the market.

Of course, such questions.

The same thought also came to Su Yi's mind at this moment.

(End of this chapter)