Hong Kong variety show: The tycoon who emerged from Portland Street

In John Fish's eyes, how could someone as unknown as Chen Mo, who was also of Asian descent, possibly have so much cash?

He wouldn't have wanted to show up if Jimmy hadn't made the appointment by calling from the Pierre Hotel.

Unexpectedly, Chen Mo actually took out so much money.

After a brief moment of shock, John's professionalism allowed him to quickly regain his composure and resume his businesslike conduct.

"Mr. Chen, given the size of your funds, we can provide you with the highest level of trading privileges and a dedicated VIP trading room."

Chen Mo raised an eyebrow and smiled, "What I'm more concerned about is how much leverage you can provide me, and what the commission will be?"

"For a fund size like yours, our company can typically provide leverage of up to 35 times."

However, since this is your first time opening an account with our securities firm and you have no prior trading history in US stocks, we can only offer you leverage up to 20 times.

The handling fee is 0.15%.

John's voice remained professionally steady, but carried a hint of tension and excitement.

If Chen Mo really chose 20x leverage, it means his operating funds reached 6.8 billion US dollars, making him a true big player.

At that time, their company will take more than 100 million yuan just for handling fees.

At this moment, Gang Shengqiu and Ahua behind Chen Mo had not yet reacted, but Jimmy and the two traders had already widened their eyes.

Sixty-eight billion US dollars! What exactly is Chen Mo planning to do?

Chen Mo's expression remained unchanged as he slowly tapped his fingers on the table. A 20x leverage was more than enough.

Even if Merrill Lynch offered him 35 times leverage, he wouldn't use it for safety.

"I can accept 20x leverage, but the commission is too high. I can only accept 0.8% at most."

When it comes to business, bargaining is essential.

"I'm sorry, sir, your requested commission rate is too low; I'm afraid I cannot accept it. I can arrange to reduce your commission rate to 0.2%, but that's the lowest I can offer."

Chen Mo shook his head: "Ten percent, this is my final offer. If you can't accept it, then I'll have to switch to another brokerage firm. I think Salomon Brothers would be very welcoming."

Salomon Brothers is another brokerage firm that is no less competitive than Merrill Lynch, and the two have always been rivals.

However, after the stock market crash, a large number of securities companies will face bankruptcy.

In order to protect their principal, some brokerages will forcibly cancel clients' transactions and liquidate their positions. Some brokerages may even misappropriate clients' principal.

The Solomon Brothers are one of them.

Therefore, Chen Mo's choice has always been only one: Merrill Lynch, which has adhered to its principles and has not gone bankrupt even after the stock market crash.

However, John was unaware of Chen Mo's true thoughts.

He thought Chen Mo would actually switch brokerages for lower commission rates.

After a moment's consideration, John had no choice but to agree to Chen Mo's offer.

Earning a little less is better than earning nothing. Letting your competitors make money is even more painful than losing money yourself.

"Mr. Chen, you win. I, on behalf of the company, agree to the 20x leverage and the 0.1% commission."

Soon, John handed several revised documents to Chen Mo.

After carefully checking and confirming that there were no problems, Chen Mo signed the document.

After settling the funds account, Chen Mo took a deep breath, his eyes sharp as knives.

"I'm going to use $300 million to set up a margin account and leverage it 20 times to establish a short position in S&P 500 futures."

Chen Mo's words were like a thunderclap, exploding in John's ears.

"Mr. Chen, are you... sure?" John's voice trembled slightly.

Although the US stock market has been declining since the end of August, most people are still optimistic about it.

Especially those within Merrill Lynch.

John L. Heymans, vice president and market strategist at Merrill Lynch, has publicly expressed his bullish view on US stocks on numerous occasions in various financial magazines and on television, earning him the nickname "Mr. Merrill Lynch."

His views basically represent the attitudes of most senior executives at Merrill Lynch.

That's why they were so surprised when they heard that Chen Mo wanted to establish a short position.

This is completely contrary to their internal strategy at Merrill Lynch.

"Mr. Chen, with a margin of $300 million, you can establish a short futures position worth approximately $6 billion."

John picked up the calculator beside him and began to calculate, rapidly saying as if chanting a spell, "The current price of the S&P 500 futures contract expiring in December is around 320 points, and the multiplier for each point is $500."

In other words, the current value of a contract is approximately $16.

With a total position of 60 billion, you would need to sell approximately…

John stopped tapping the calculator.

"37500 contracts."

This number caused the air in the entire conference room to freeze for a moment.

"hiss--"

"hiss--"

The sound of gasps for air echoed throughout the conference room, as if trying to suck all the air out of it.

Such a large number of short positions, if all of them were put into the market, would inevitably cause ripples.

John asked gravely, "Mr. Chen, are you sure you want to do this?"

Jimmy couldn't help but advise, "Brother Mo, aren't you going a bit too far?"

Chen Mo ignored Jimmy and said in an unquestionable tone, "Mr. John, I am very sure of what I am doing."

Could you please lend me 37500 S&P 500 futures contracts?

John thought Chen Mo was absolutely insane.

Although he shouldn't interfere with Chen Mo's decision, he couldn't help but add the risks involved to Chen Mo's explanation.

"Mr. Chen, I must emphasize that 20x leverage means that market volatility will be amplified to an extreme degree."

If the S&P 500 index rises by more than 5%, your margin may be required to meet a margin call; if the rise reaches or exceeds 5.5% and you fail to provide additional margin in time, you will face forced liquidation, in which case not only will you lose all your principal, but you will also incur huge debts.

"I know," Chen Mo answered decisively. "My decision is final."

"Alright." Seeing Chen Mo's insistence, John didn't try to persuade him further. "Please wait in the trading room for a while. The 37500 contracts will be credited to your account soon."

John turned and left, leaving an assistant to lead Chen Mo and the others to a VIP trading room.

The trading room is equipped with a Bloomberg terminal, which allows users to view market trends in real time.

It is also equipped with three dedicated telephone lines for contacting the exchange to conduct transactions.

After Chen Mo and the others waited in the trading room for more than ten minutes, John arrived with a pile of documents.

"Mr. Chen, the 37500 contracts you requested are ready."

A hint of excitement flashed in Chen Mo's eyes as he took John's documents and began to look through them.

A few minutes later, Chen Mo signed all the documents.

After John left, Chen Mo turned to look at the traders Henry and Pete.

"How long would it take you to sell 37500 contracts in multiple, dispersed batches without alerting the market?"

Henry and Pete frowned and pondered for a long time, then whispered among themselves before answering Chen Mo: "It will take at least a day and a half."

Chen Mo nodded and said, "Then let's get started. Sell all the contracts before the market closes tomorrow."