Starting with a fully invested A-share portfolio to become a capital...

Chapter 261: Billion-Dollar Options Trigger a Chain Reaction; Zhang Yang Meets Yang Xingping Again

"Hello sir, how can I help you?"

Hong Kong Island Monetary Authority.

Transaction data database registration window.

The female staff member, Zhai Jiashi, spoke fluent Hong Kong-style Cantonese. She didn't look up but was tidying up the documents on the table.

"We're here to register for the 'Over-the-Counter Short-Term Out-of-the-Money Options Contract,' right? This should be the window, isn't it?" Liao Guopei asked.

Upon hearing that it was an over-the-counter option, Zhai Jiashi looked up in surprise, glanced at Liao Guopei, and then looked at Lin Guangchang next to her.

He has an ordinary appearance, a common face, and doesn't look rich at all.

However, those who can negotiate over-the-counter options must have a net worth of at least HK$500 million.

Although HK$500 million is only considered middle class in Hong Kong, those who can cross the HK$500 million threshold and negotiate off-exchange investments with institutions generally have a net worth of tens of millions.

Most importantly, Liao Guopei's Cantonese accent is not a Hong Kong accent. For investors from the mainland, the only option is usually "extremely wealthy".

"Yes, give me the contract documents."

"for you."

As Liao Guopei handed over the documents, he asked, "Do I need any identification?"

“It needs to be verified,” Zhai Jiashi nodded.

Upon hearing this, Liao Guopei and Lin Guangchang both handed over their travel documents to Hong Kong.

Zhai Jiashi took the documents, and the identity information matched the "Options Contract." However, when she saw the option amount...

"10 tickets, 1000 shares each, worth HK$11.68 billion! My God!!!"

Morgan Stanley!

"This one too!"

"It was signed with Citibank!"

"This one is still 11.68 billion!"

"This, this, this..."

"Stock options worth nearly 10 billion..."

Zhai Jiashi's hands were trembling slightly.

She had thought Liao Guopei and Lin Guangchang were wealthy people from the mainland, but she didn't expect them to be this rich. They not only signed "Short-term Out-of-the-Money Option Contracts" with foreign banks such as Citibank, UBS, Goldman Sachs, and Morgan Stanley, but also with local Hong Kong securities firms such as Tai Fook Securities and Sun Hung Kai Financial.

What do you want to do?
What message did you receive?
"Gulu——"

Zhai Jiashi swallowed hard. She didn't know what China Unicom would experience in the next month, but there was a high probability that there were hidden problems that were about to explode. Otherwise, Liao Guopei and Lin Guangchang would not have opened so many short-term put option contracts.

Despite being deeply shocked, she forced down her trembling hands and entered the relevant contract details into the Hong Kong Monetary Authority's computer, then uploaded it online for filing.

According to the Securities and Futures (OTC Derivative Transactions – Reporting and Record Keeping Duty) Rules (Chapter 571AL), both parties to a transaction are required to submit transaction details, including contract terms, notional principal, and counterparty, to the transaction database designated by the Hong Kong Monetary Authority within two working days after the transaction is executed.

This obligation applies to all over-the-counter derivatives transactions, regardless of whether they are standardized contracts. After fulfilling the disclosure obligation, you may choose not to settle through CCP.

While Liao Guopei and Lin Guangchang were registering their contracts, Zhang Yang also received a call from Bao Xingwei, which did not surprise him.

"Hey, Mr. Bao."

"They went to Hong Kong Island?"

Bao Xingwei got straight to the point.

The fact that they specifically mentioned Hong Kong Island clearly indicates that they were asking the question with an answer in mind.

"Yes, on Hong Kong Island."

Why the sudden trip to Hong Kong Island?

"Short China Unicom."

"..."

Such a straightforward answer left Cheng Hong, who was standing next to Bao Xingwei, stunned.

Before making that call, Bao Xingwei had thought of a million reasons for his arrogant and sophistical arguments, and he had also thought of a million ways to expose them.

But now?

Is sincerity the ultimate weapon?

"Could it be that I wrongly accused Zhang Yang, and he didn't secretly transfer the money?"

Cheng Hongfa murmured to himself.

Not only Cheng Hongfa, but Bao Xingwei also paused for a moment, completely unexpected that Zhang Yang would admit it so readily.

Although Bao Xingwei was only a hundred years old, his mind was not dull. After a brief hesitation, he asked again, "What news have you received?"

"I don't have any inside information. I just speculated from the software compatibility that the Chinese version of the iPhone 3GS would not be compatible with the local market. It's like a mansion deep in the mountains. It's fine to live there for a week or two, but if you want to live there long-term, it's not as good as a pigeon coop in the city center because it's inconvenient in every way," Zhang Yang said, revealing his speculation.

"So, you're saying you dared to bet hundreds of millions in Hong Kong based solely on your own assessment of the future sales of the mainland China version of the iPhone 3GS?"

A look of surprise flashed across Bao Xingwei's slightly cloudy pupils. This was simply too crazy, too confident, and too decisive!
He had assumed that Zhang Yang had made connections with some bigwig and learned inside information about China Unicom. He never expected that Zhang Yang would dare to go to Hong Kong Island to short the stock based solely on his own deductions. The amount was so large that it even alarmed the Hong Kong and mainland Monetary Authority.

Crazy?
Absolutely insane!!
This decisiveness, execution, and overconfidence bordering on arrogance reminded Bao Xingwei of the king of speculation—Jesse Livermore.

Despite his impoverished later years, Jesse Livermore made a fortune by accurately predicting the stock market crash during the Great Depression of 1929. He earned $1 million by shorting the Dow Jones Industrial Average, equivalent to $150 billion today, becoming the most famous short seller in Wall Street history. Even Bao Xingwei greatly admired him and studied his trading strategies.

"Yes."

Zhang Yang gave an affirmative reply.

The current popularity of the Chinese version of the iPhone 3GS is purely due to users' desire to "try it out," and its true nature will soon be revealed.

After quickly processing the information, Bao Xingwei thought of something else and asked, "Are there any short-selling contracts with institutions in mainland China?"

"Have."

Zhang Yang answered truthfully as before.

Bao Xingwei: "..."

Cheng Hongfa: "..."

They never expected Zhang Yang to go to such lengths, not only signing agreements with mainland institutions but also shorting China Unicom in Hong Kong.

After hesitating for a moment, Bao Xingwei asked the question that concerned him most: "If you win, how will you divide the money?"

Zhang Yang: "I will use it for auction."

Upon hearing the word "auction," Cheng Hongfa thought to himself, "Goodness, this kid's really not going to put on an act anymore."

Why are old stamps valuable?

Why are calligraphy and paintings by famous people so valuable?

Why are antiques valuable?

Cultural value is one aspect, but the deeper reason is to use auctions to facilitate the transfer of profits and money.

"What auction?" Bao Xingwei pressed for an answer.

Zhang Yang: "Securities license."

"You want to bid for the securities sales license in Xueyu?" Bao Xingwei suddenly realized and quickly asked.

"That's right. Xueyu Securities has been losing money every year. If I'm not mistaken, that's why the higher-ups are thinking of handing over this securities license to an internet company to operate."

Zhang Yang spoke his mind.

The snowy plateau is sparsely populated, and not many people use mobile phones, let alone the internet.

Although a large number of tourists visit the snowy region every year, they generally don't think about opening a securities account at the same time.

Because it lacked new customers, Xueyu Securities had been in a state of semi-death, with no money to improve its operating system and open branches in inland areas.

It is precisely because Xueyu Securities' performance is poor that it even wants to sell itself. In addition, with the rise of Internet finance, the authorities are also intentionally pushing for the change of ownership of this securities license.

Because it was distributed through an auction process, Caiyan.com's biggest competitors are no longer Eastmoney and Tonghuashun, but Tencent Finance, Sina Finance, and NetEase Finance.

Nobody knows whether Tencent, Sina, and NetEase will pool their resources to snatch this only securities license.

Zhang Yang had also carefully considered the options. He could attract capital from companies like Alibaba, Baidu, and Hongyue Group, but these companies wouldn't help him for no reason. They would most likely take a cut, and Zhang Yang didn't want them to share the profits unless absolutely necessary.

"Understood. Give me a call when you come to Yanjing." Bao Xingwei seemed to have finally let go of his worries, and his tone became much more relaxed.

Although Zhang Yang was his most promising stock, and he even publicly predicted the collapse of the A-share market, Bao Xingwei was willing to lower his own value to protect him. However, if that red line is crossed, Bao Xingwei will not hesitate to stand on the side of national interests.

Internal squabbles are fine, but when it comes to foreign investment, we have to be cautious and make careful choices!

"Okay, Mr. Bao. By the way, would you like me to bring you some liniment? It's a specialty of Hong Kong." Zhang Yang breathed a sigh of relief. He had long expected that he couldn't hide it from Bao Xingwei, but since he knew where the red line was, he didn't cross it.

To put it bluntly, he has nothing to fear if he is upright; everything he does is aimed at quickly becoming a source of capital.

"Thank you for your kindness, but I have plenty of medicinal wine here, more than I can use," Bao Xingwei politely declined.

Zhang Yang: "Alright then, I'll visit you again, Mr. Bao, once the date for the securities license auction is set."

It is now widely known in the financial industry that the government is going to loosen restrictions on fund license applications and that Xueyu Securities will be auctioned off soon, although the exact timing is still unknown.

Seeing Zhang Yang sharpening his tools, Bao Xingwei also gave him some extra advice: "It won't be later than December. Prepare well, as this may be the only securities license you can get."

Xueyu Securities is selling itself because it is unable to continue operating. There is no mention of acquiring a new securities sales license, which reveals a certain attitude.

Fund licenses can be liberalized, but securities licenses still need to be treated with caution.

"Thank you, Professor Bao. I've got it."

Zhang Yang was overjoyed.

It shouldn't be later than December, which gives us two months to prepare. With some effort, raising 5 billion shouldn't be a problem.

"Go about your business."

"We'll talk later."

"Talk to you later." As the call ended, Bao Xingwei glanced at Cheng Hongfa beside him and muttered to himself, "Zhang Yang is really good at stirring things up. Judging from the current development, he really didn't choose the wrong path."

If Zhang Yang had agreed to Bao Xingwei's request to return to Yanjing with him, pursue a master's and doctoral degree at the Central University of Finance and Economics, become a disciple of a financial academician, and eventually join a financial think tank, the time it would have taken to achieve his goals would not have been less than 10 years.

10 years.

How many decades does one have in a lifetime?
However, when Zhang Yang abandoned a clear path and embarked on an unknown one, Caiyan.com became a top-tier internet finance company in just six months, and Zhang Yang himself became a leading speculative investor, earning wealth that is unimaginable to ordinary people.

Having worked his way up in the industry for many years, Cheng Hongfa naturally picked up on Bao Xingwei's implication and said, "He is indeed very capable."

He wasn't lying when he said that Zhang Yang was indeed the most talented and daring young man he had ever met.

Cheng Hongfa originally thought that Zhang Yang's stock speculation and the establishment of the financial research website were just a show for Bao Xingwei, so that the latter would allocate institutional resources and thus directly enter the financial think tank.

But now?

Cheng Hongfa realized he was wrong.

Upon hearing Zhang Yang's plans for the future, he was shocked to discover that Zhang Yang had absolutely no interest in joining a financial think tank; instead, he was determined to pursue the path of internet finance to the very end.

"hehe…"

Cheng Hongfa smiled bitterly to himself.

He took a huge risk to trip up Zhang Yang, his imagined enemy, but Zhang Yang never even glanced at him.

Seeing that the warning had worked, Bao Xingwei didn't want to be too harsh on Cheng Hongfa. He only hoped that Cheng Hongfa could get along peacefully with Zhang Yang. After all, Zhang Yang had been with him for nine years and was loyal. So he said, "It's getting late. Let's get the car ready. We have a dinner party to attend."

"Okay, Mr. Bao."

Cheng Hongfa nodded quickly.

As he turned around, a hint of worry flashed in his eyes. Trying to use other forces to bring down Zhang Yang was a violation of the rules; if things were exposed…

"I really shouldn't have acted impulsively."

After realizing that Zhang Yang wasn't putting on a show, Cheng Hongfa had completely calmed down.

The reason he lost his temper was mainly because Zhang Yang could easily obtain what he had not been able to obtain for many years, which caused him to feel extremely unbalanced.

It's like pursuing a goddess for nine years without success, only to have her start a relationship with someone else in just two days. Who could remain rational in that situation?
……

And on the other side.

Hong Kong Island, China.

With the registration completed by Liao Guopei and Lin Guangchang, the Hong Kong Monetary Authority also became aware of the short sellers' identities.

Less than half an hour.

Several leaders took their seats for a meeting.

"With billions of dollars in options and a strike price of HK$10, the other party must have some information. Anyway, I don't understand what's so special about China Unicom that's worth shorting."

“I heard that these two were just errand runners, and the one who actually negotiated the details with the organization was a mysterious Chinese man named Mr. J.”

"Should we check it out?"

"How to check?"

"Check the call logs."

"They're not stupid. They'll use a few anonymous phone cards, and you won't be able to find out anything even if you search until next year."

"So, what are your opinions now?"

"It's like Zhou Yu beating Huang Gai – one is willing to hit and the other is willing to be hit. Since the institutions are willing to sign options with others, we don't need to intervene unless there are any special fluctuations."

"Director Liu is right. Institutions only sign these contracts because they see the benefits. We can't just cancel their option contracts. Besides, foreign institutions make up a large portion of these companies. If the stock price really falls, we might even earn foreign exchange."

"That's the truth."

"Director Liu is the most fair. Director Liu, please say something. Do you want to have a meeting with the organization and Liao Guopei and Lin Guangchang?"

When these words were spoken, everyone in the conference room turned their attention to a man who appeared to be in his fifties and had a refined demeanor.

Director Liu pulled a pack of cigarettes from his pocket, shook his head, and said, "It's a case of one willing to hit and the other willing to be hit. Let them do whatever they want. We're just here to collect taxes."

It's not that they don't want to get involved, but rather that they simply don't have a starting point to do so.

A short-selling operation worth tens of billions of dollars is in accordance with procedures, in the interests of institutions, and in the interests of investors. Who will bear the losses incurred from preventing it?
Now that they have information about Liao Guopei and Lin Guangchang, they will wait for the results to be announced in 30 days and then make further plans.

During a meeting of the leaders of the Hong Kong Monetary Authority, Zhao Danyang, who had traveled from Shenzhen to Hong Kong, had already signed a "Short-Term Out-of-the-Dots Option Contract" with Citibank.

He then went on to work at Morgan Stanley, HSBC, Jaguar Fund and other institutions, opening up options positions at an equally frenzied pace.

Unlike Zhang Yang, Liao Guopei, and Lin Guangchang, Zhao Danyang was firmly bullish on China Unicom, so he opened a "short-term out-of-the-money call option contract".

Open one side to air.

Open multiple times on one side.

Upon receiving the news, David Smith exclaimed, "This is insane! These people are absolutely insane!"

He was a worldly man, yet he was still astonished by such a frenzied battle between bulls and bears.

Hong Kong Island is very small, and news spreads very quickly. Within just a few hours, news media outlets had already reported on the matter.

Anyone who follows Hong Kong Island news knows they excel at grabbing attention.

For example, in 2006, Jaycee Chan was arrested for smoking "flour". Uncle Lung (Jaycee Chan's real name) asked his lawyer to slap him twice. The Hong Kong media headline was "Uncle Lung angrily beats his son, sending him flying 5 meters into the air". Such exaggerated news headlines that defy the common sense of physics can pique people's interest in a second.

Furthermore, GEM wore white shorts at a concert, prompting Hong Kong media outlet Apple Daily to publish an article titled "GEM's 'Cosmic Diaper' Blows Up the Earth," with the subtitle adding fuel to the fire by calling it "Disaster Warning, Shirt-Level Storm," which quickly attracted the attention of many netizens.

The arrival of the "mysterious financier" has sparked a lot of speculation among Hong Kong media.

Is the "Eastern Soros" making a comeback by shorting Hong Kong stocks with billions of dollars?

"Is a financial crisis looming? China Unicom is reportedly the site of a multi-billion yuan short-selling of options; retail investors on the exchange are reportedly so excited they've wet themselves."

"The financial tsunami inundates Hong Kong Island; who are these mysterious financiers?"

While exaggerated headlines and news stories emerged one after another on one side, netizens and stock investors on Hong Kong Island began to comment on the "mysterious financier."

[Wan Chai Quick-draw]: Wow, what the hell? Billions? China Unicom has broken some cardinal rule, pulling this whole stunt!

[Spinning and Running Takes Me to Take Off]: Based on my years of stock trading experience, now is the safest time to add to the short position. The other party dares to place such a bet, so they must have some information.

[Useful Youth]: The Chinese version of the iPhone 3GS is sold out in mainland China, how could China Unicom's stock price drop? Dude, do you even know how to trade stocks?
[Stock trading to support a mistress]: They're right, stock trading is about following the trend. If you have small capital, you definitely need to follow large capital to make a profit.

Amidst the heated discussions on the Hong Kong internet, Zhao Danyang, who had just returned to his hotel, arranged for a foreign woman to keep him company. While studying the foreign language, he also pondered who this so-called "Mr. J" really was.

"Forget it, no matter who the other party is, they can't interfere with China Unicom's stock price increase."

Zhao Danyang whispered.

After saying that, he began to focus on learning foreign languages. He calculated that it had been almost half a year since he had last visited Hong Kong Island.

Unlike Zhao Danyang, who studied foreign languages ​​on her own, Zhang Yang, Liao Guopei, and Lin Guangchang attended a relatively elegant masked party hosted by the Mandarin Oriental Hotel.

Zhang Yang and Lin Guangchang were simply chatting and making friends, practicing their social skills in public. Liao Guopei, on the other hand, disappeared within ten minutes of entering the masked party, and no one knows what he did.

……

The next day, February 11th.

The three did not stay in Hong Kong Island for long, but instead took flights back to Shanghai one after another.

It's worth mentioning, however, that Zhang Yang didn't fly directly from Hong Kong Island to Shanghai; instead, he went through the border crossing and first arrived in Shenzhen to handle some business.

Futian CBD business district in Shenzhen.

Starbucks.

Wearing a white shirt, with a thin face and round black-rimmed glasses, Yang Xingping handed the "Smartphone Business Plan" to Zhang Yang.

"I've already calculated it. With the current mobile phone industry chain in China, it would take about 2 million Chinese yuan to operate a brand from scratch. Of that, 5000 million yuan would be used to purchase components, 5000 million yuan to find contract manufacturers, and another 1 million yuan to recruit relevant optimization talents, such as system UI design, which is of utmost importance. The other part is marketing and traffic investment."

Zhang Yang picked it up, flipped through a few pages, and then casually put it down, saying, "Let's get the marketing PPT done first. We don't need to rush to make the phones, because the software support isn't perfect yet, and smartphones have certain limitations in their use."

"I've actually been thinking about this issue too, but the Chinese version of the iPhone 3GS is selling so well that if we don't get in early, we might end up being eliminated," Yang Xingping said, sharing his opinion.

Starting a business is different from other ventures. The earlier you get involved, the more likely you are to succeed. The logic of competing in incremental markets and competing in existing markets are two different things.

However, Yang Xingping had no idea that Zhang Yang had already found the answer in his past life's memories, so he was not in a hurry to make mobile phones.

What is the answer?
Refer to Lei Jun's entry timing.

Lei Jun is an extremely intelligent person. His greatest strength is not marketing, but his ability to integrate resources in a particular industry chain.

In essence, his involvement means that a certain industry chain has become very mature, eliminating the need for him to bear research and development costs. He can acquire the right to use the most advanced core technologies in a certain industry at minimal cost, thereby producing products that are inexpensive yet of top-quality.

In his previous life, when Zhang Yang was a fund manager, he systematically analyzed Lei Jun and clearly remembered that Lei Jun entered the smartphone field in April 2010 and released MIUI, a customized system based on Android, in August 2010.

Therefore, Zhang Yang plans to allow the smartphone industry chain to develop for a while longer, and also give internet companies time to develop mobile software. When the time is right, he will use a low-price, high-spec strategy to follow Xiaomi's path and leave Xiaomi with nowhere to go.

Despite Yang Xingping's persuasion, Zhang Yang insisted on his view: "Electronic products are updated and replaced very quickly. What we need to do now is to let our competitors pave the way, and then catch up with and surpass all our competitors by running."

"Oh, right."

As soon as he finished speaking, Zhang Yang seemed to remember something and reminded him, "I've been in contact with Samsung Group. They offer 100 billion in profits over 5 years. If nothing unexpected happens, we should be able to secure the exclusive agency for their LCD mobile phone screen assemblies."

"What? 100 billion over 5 years?"

Yang Xingping was puzzled.

“I told Lee Boo-jin that I would help Samsung Group increase its net profit by 10 billion yuan within 5 years, which is an average of 2 billion Chinese yuan per year.” Zhang Yang briefly summarized the bargaining chips at that dinner party.

"..."

Yang Xingping fell silent, his eyes fixed on Zhang Yang.

Five years, 10 billion yuan in Chinese currency, and that's just net profit. They haven't even made a single phone yet, and they dare to make such a promise. He suddenly felt that Zhang Yang was a bit unreliable.

Too radical!

too crazy!

Seeing the other party's surprised look, Zhang Yang took a sip of coffee and said with a faint smile, "I can't be sure about 100 billion in two years, but you can rest assured about 100 billion in five years. The development potential of the mobile Internet will far exceed your imagination, just like the 4C strategy you posted on Weibo, it has a very promising future."

(End of this chapter)