From legendary short seller to god of American capital

Chapter 382 Black Monday: The Great Crash of Wheat Futures

The trading hall fell into a deathly silence, the ticking of the clock sounding particularly jarring in the vast stillness.

Countless eyes were fixed on old Stone, and the exclamations of surprise didn't reach the battlefield until five seconds later.

Old Stone's planned gap up appears to be only 3 cents higher than before.

On the one hand, people's expectations had already fallen to the bottom area of ​​68 cents, while on the other hand, based on the day's increase, 73 cents was already a super high opening of 4.2%!

This is unprecedented since wheat futures entered a bear market, and people are naturally shocked.

A trader asked in a trembling voice, "I have 15 lots here—can you really buy them for 73 cents?"

"Yes!" Old Stone said, tilting his head back and raising his voice.

"Okay! Okay! Deal!" the trader shouted at the top of his lungs.

Boom!

The entire trading floor seemed to be unmuted, and a cacophony of voices erupted from the crowd. Traders, like moths to a flame, scrambled to hand their sell orders to Old Stone.

"73 cents, I have 20 lots!"

"11 lots! I'll match the price!"

Amid the shoving and pushing, someone shouted, "My God! What's going on? Is there some good news about wheat?"

"I need an explanation! Why are you buying wheat at such a high price? How many buy orders do you actually have?"

"For God's sake, tell me why! You'll get a share of my profits!"

On the outskirts of the crowd, several traders who had originally planned to buy at a low price gathered in a small circle, asking each other what had happened. Old Stone had started placing large orders again!

"Stone Corporation—they caught the top and bottom three times in the past few weeks. Could it be that some big shot has made their move again?"

"A trader asked urgently."

Everyone else fell silent.

Old Stone wasn't always this successful; he was just a mid-level floor trader. It wasn't uncommon for floor traders to occasionally hold large buy and sell orders.

But the strange thing is that Old Stone himself has been doing incredibly well in the recent wheat trade, as if by magic!

His exceptional trading skills and ability to help clients manage large positions were already well-known in the industry.

Recently, Stone has been involved in almost every key price turning point in wheat futures. First, Stone sold 500 million bushels of wheat when the price was still above $1.20; later, it engaged in extreme short-term trading, buying at the day's highs and lows.

Later on, whenever prices were on the verge of collapse, Stone and his son would short sell large amounts at round numbers, and prices would subsequently plummet.

Once is a coincidence, twice is a coincidence—but what about three times? Four times?

Those who were interested had long been watching Old Stone, speculating that he was acting as a middleman for some powerful figure.

Today, seeing that he didn't buy low but instead opened high and bought heavily, everyone was excited and convinced that the big shot behind him had started to make his move.

After a few seconds of thought, someone was tempted.

He walked to the edge of the group of traders and shouted, "I'm buying too! 73 cents, I'll buy 20 lots! Anyone have any, give them to me!"

"The rebound is here!" another person yelled to his companion. "Wheat is going to soar! Buy it now!"

This is something that's hard to imitate. Soon, a third person also raised his arms and shouted, "Buy 40 lots of wheat! Same price as them. If you can't get in line, come to me."

Other traders were surprised to find that almost all of them were buying.

"Has the workers started another strike? Or has the wheat been damaged by frost?"

"I think it must be a European issue—"

All the traders had the same thought:

Something must have happened! I just don't know it.

Although I don't know the reason, it doesn't stop me from following the new trend!

Or, should I buy some wheat futures too?

"Buy it now, don't wait!"

Someone shouted, and the other traders seemed to suddenly wake up. The crowd surged towards the counters to trade, and the prices of corn and oats jumped wildly—market sentiment had begun to spread.

Immediately, the price, having opened high, began to slowly climb. From 73.25 cents, to 73.5 cents—and then incredibly quickly rose to 74 cents.

Wheat prices have seen a rapid surge.

When the opening price on the quote board was frozen at 73 cents by someone flipping the board, the traders and spot dealers gathered outside were stunned!

The gasps of surprise from the crowd sounded like those of a church choir.

No one knew what had happened, and they all rubbed their foreheads and asked each other what was going on. Some even shouted and demanded that their brokers temporarily suspend their contracts.

The scene in the hall was chaotic. Some were surprised, some were laughing, and some were even standing under the marble pillars, shouting to those around them, "Rebound!! The rebound has finally come! From now on, wheat prices will skyrocket!"

The deafening noise nearly blew off the stained-glass dome of the stock exchange.

In the private room on the second floor, Larry's fingertips gripped the railing tightly, his shirt already soaked with fine cold sweat.

300 lots of wheat! 150 million bushels!

Even though I had calculated it carefully beforehand, opening a long position against the trend still resulted in a much larger long position than a short position!

This comes with enormous risks.

This could be the fulcrum to leverage the market, but it could also be the deadly weapon that undoes all your previous efforts.

"If no one follows suit—this order is practically free money."

The plan to go long using intraday trading was indeed premeditated, but there is still a possibility of the opposite happening.

If the market fails to rally and continues to decline, Larry's newly entered long positions will quickly devour the profits from his short positions, potentially causing him huge losses.

After all, he was trading against the trend—that's what really made Larry nervous.

But as Larry told Matthew, we are at a critical point in the market. Prices are in a period of uncertainty, and if we try to manipulate them, prices could collapse.

So Larry decided to take a gamble and support the market at this crucial point.

For a full two minutes after the market opened, the wheat price on the price board remained unchanged at the opening price of 73 cents.

Larry was so nervous he didn't dare breathe.

Two minutes later, the traders standing behind the price board in the Chicago trading floor received the latest quotes and began flipping through the wooden plaques behind the prices, preparing to update the second unusual price after the gap up.

Everyone craned their necks, nervously watching this long-awaited new price.

"73.25 cents!! My God."

"It's really rebounding! Prices are going up!"

"It seems unlikely that the price will continue to fall today, which presents a good buying opportunity."

The first reaction of everyone was to rush to their respective broker's counter. One person held up a trading order and shouted to the floor trader, "Buy it! I want a full 25 lots of wheat!"

The market frenzy quickly escalated, and people's faces were flushed with excitement.

Once the oppressive pressure of the long-suppressed bear market eased slightly, the logical judgment that "I always knew futures couldn't be much lower than spot prices" was instantly revived.

People started reversing their positions and going long.

Larry let out a long sigh of relief, watching the wheat prices rise steadily for the second and third consecutive days, and finally felt relieved.

Matthew, standing to the side, exclaimed, "Sure enough! Your order actually lifted the market—this is insane!"

Larry nodded, a smile on his face. "If there's good news in a bear market, there will be a huge surge. This kind of bandwagon buying is not surprising."

"But there's no good news right now!" Matthew asked.

"Indeed not—" Larry said with a smile, turning to look at the bustling crowd in the exchange in the distance, "But the market is undoubtedly the best spokesperson. You don't need to emphasize to the public that the price is fair or that there is room for future growth—as long as you can let the price speak for itself, those traders, both on and off the exchange, will imagine the corresponding positive effects themselves."

"Is this... really true?"

"Of course, but this feeling probably won't last long," Larry said with a laugh.

In the following fifteen minutes, wheat prices began to soar, soon reaching a representative level of 77 cents, a level that was also the absolute low for wheat last year.

"It's reached the resistance level!" Matthew shouted to Larry, staring at the price chart.

Larry's reply was calm: "Okay."

"Aren't you going to sell and close your 300 long positions here?" Matthew asked again.

Larry shook his head slightly. "Wait a little longer. These 300 lots, while numerous, aren't for short-term profits, but rather for—"

To disrupt things at a key location.

Matthew Tilarie felt nervous.

Larry has 300 long positions in his account. For every cent the price rises, it will increase the account profit by $15,000. Just thinking about this makes Matthew's heart pound again.

The price consolidated around 77 cents for a full 5 minutes before breaking through the resistance level, skipping 77.25 cents and climbing directly to 77.5 cents!

"One cent!"

The trading floor erupted! Some people jumped onto chairs waving order slips, while others rushed to the windows shouting, "The bull market is here!"

Larry finally loosened his grip on the railing, the blood in his fingertips taking a moment to return. Looking at the sea of ​​people inside, he coldly stated, "The market never needs the truth; prices will tell their own stories!"

Matthew paused, then nodded.

"Let the Stones' youngest son in!" Larry turned to look at Matthew.

Five minutes later————

Old Stone held Larry's latest commission list in his hand, his face once again showing a shocked expression.

"What?! Not only are they going to clear the previous 300 lots, but they're also going to—short 100 lots every cent!"

Old Stone practically spat those words out between his teeth.

His youngest son nervously swallowed and nodded in confirmation!

Old Stone suddenly looked up at the second-floor private room. "Madman! Absolutely insane! He's a monster."

"Then—what should we do?" the youngest son asked, frowning.

"What else can we do?! Damn it," old Stone glared at his youngest son and sighed, "After today, we'll be everyone's enemy!"

Immediately, old Stone turned around abruptly and strode back to the trading floor.

At this point, the price hovered around 77.5 cents for some time. The bulls and bears were locked in a stalemate, and the market was already on the verge of volatility due to the lack of new buying power.

"Sell 300 lots at market price, 77 cents!"

Old Stone's instructions were like a bucket of ice water poured over everyone's heads.

The crowd's jubilation froze instantly, and everyone stared at him in astonishment.

"Any buyers? 77 cents! I want to sell and close my position!" Old Stone shouted, gesturing wildly.

"Yes—yes! But I don't have that many." One person quickly ran forward to hand over the money.

"Who else?" Old Stone raised his voice again.

"Me! But why did you sell? It's only reached 77.5 cents!"

Old Stone ignored everyone and frantically cashed out the 300 lots of long positions Larry had initiated!

这300手建仓的位置是73美分，平仓的位置是77美分，每手盈利200美元，300手的总盈利是6万美元！

"Is he not strategically going long because of positive news, but just making a short-term trade?"

"That's not right! Why would he raise the opening price in the short term? Is there some other motive?"

"Hey! Old Stone, what the hell are you doing?!"

The traders in the room began to get anxious. Old Stone ignored everyone with a stern face. After closing his 300 long positions, he suddenly made another hand gesture.

"77 cents! 100 lots of wheat sold!"

Boom~~

It was as if bombs had been dropped around the wheat trading table; the traders' mouths were agape in disbelief.

Not only did Old Stone close out all his long positions, but he's actually started shorting again?!

What kind of operation is this?

"Old Stone! Are you fucking crazy?" someone yelled angrily.

-

"Shut up! I'm fucking fulfilling a client's request!" Old Stone yelled back, his face flushed. "Don't forget you're an agent! Why are you asking so many questions?"

The implication of these words couldn't be clearer: there was absolutely no positive news—no large-scale buying!

It was all just a dazzling bubble!

As if waking from a dream, everyone scrambled to sell their wheat.

76.5 cents! 76 cents! 75 cents!

For every cent the price dropped, old Stone yelled at the floor traders, "Sell 100 lots!"

Wheat futures prices are plummeting as if pushed by a giant hand.

At the wheat futures counter, the crowd that was excitedly buying just moments ago is now selling in a noisy frenzy, like headless flies.

74 cents—

"That's not right! We just opened our position at 77.5 cents!"

73 cents—

Someone grabbed a transaction slip and slammed it to the ground, sending transaction slips flying everywhere like snowflakes.

72 cents—

In the corner, a white-haired trader suddenly slumped into his chair, his fingers clenched tightly against his chest, and cried out in despair, "I want to close my position! I'm cutting my losses! I'm never trading again!"

"70 cents!!!"

When someone called out the latest transaction price, the air in the hall suddenly froze.

"It's dropped seven cents!" someone wailed. "My margin—it's all gone!"

Chaos erupted as an invisible fear gripped everyone. The market climbed from 73 cents, peaked at 77.5 cents, then fell below the opening price, closing at 70 cents on Saturday.

Prices may seem to have remained unchanged, but many people have already lost all their capital. Those who were just waiting for the market to drop so they could buy at the bottom are no longer able to make any additional trades.

Panic began to spread among the crowd; people didn't know when the price of wheat futures would end! Some even thought—a price collapse was supposed to happen today!

In an instant, countless new short selling orders and stop-loss sell orders flooded the market like a torrent.

The market easily broke through the 70-cent mark and fell to 69.75 cents!

But none of the people in the chaos noticed that Old Stone did not continue to short sell at this position.

Because according to Larry's instructions, after closing out 300 long positions, he could only open 700 short positions!

From 77 cents to 71 cents, Stone smashed 100 times every cent, as ruthlessly as a cold-blooded killer.

Now, all 700 short positions have been established.

Old Stone seemed to have all his strength drained away. He staggered to the edge of the trading floor, plopped down on the ground, and watched as the masses inside the trading floor descended into madness.

Prices have occasionally stabilized or rebounded, but the overall trend continues to decline.

69.5 cents! 69 cents! 68.5 cents — eventually, the price fell to a five-year low of 68 cents.

This was the bottom area that everyone had previously identified. Prices have stalled here, and the bears seem to have run out of energy to push the price down further.

It was already 11:53 a.m., only 7 minutes before the morning market closed.

The market is in a state of flux, with only a few small transactions occurring at this level, as both buyers and sellers remain on the sidelines.

Old Stone felt a little breathless, so he unbuttoned his shirt to make himself feel a bit better.

Just as he was about to wait for the morning session to end, Xiao Jizi rushed up to him, his face full of anxiety!

Old Stone felt as if his heart had been clenched tightly. He looked up at his youngest son, his eyes filled with questions.

"Mr. Livingston's order!" The youngest son handed over another transaction slip.

"Impossible!" Old Stone suddenly stood up, snatched the trading order, and saw a line written in bright red on the paper: Now! Short 700 lots at market price!

"Impossible!" Old Stone shouted again. "Livingston's account can only open 700 lots. His unrealized profits from today haven't been settled yet, so he can't open any new positions! He can't possibly sell any more positions today!"

In truth, Stone was no less panicked than any other trader.

He knew that if his major client shorted heavily again at 68 cents, the market would immediately go for the all-time low of $64.5!

That would cause a total collapse in wheat futures and spot prices!

Now, the other party is indeed going to sell 700 short contracts at once, aiming to crash the wheat futures market.

That shouldn't be the case! According to Larry Livingston's account, he shouldn't be able to sell any more shares now!

This must be a rejected order!

Old Stone comforted himself.

The younger son wore a helpless, bitter smile. He shook his head and sighed, saying, "Mr. Livingston sent someone with $13 in cash, which he just deposited into his account! Father—forget what your colleagues think, you should carry out this commission before noon!"

Old Stone was suddenly stunned. He looked at the order form in his hand again and again, then suddenly turned around and went back into the trading floor.

With just two minutes left until noon, the traders were panting like wild dogs after a fierce battle.

But when they saw old Stone return, a heavy cloud of doubt immediately settled over them, and a bad premonition flashed like thunder in the dark clouds.

Old Stone stood there, looking at the crowd, his Adam's apple bobbing. He took a deep breath and shouted, "700 lots! At the current price! Sell! I want to sell them all!"

>