"Oh my god! Today's market carnage truly caused rivers of blood."
Inside the VIP trading room of Huaxin Securities' Financial Street Fuxing Road branch, General Manager Deng stared at the frozen market boards of both exchanges, stunned for a while before snapping back to reality, his heart unable to calm for a long time.
"Today's market trend has made history again."
The scissor difference in gains between the Shanghai Composite Index, A50 Index, and the ChiNext Index, SME Board Index, CSI 500 Index has widened to a nearly 10% gap.
This phenomenon of extreme divergent trends.
Even though General Manager Deng was an experienced investor with ten years of stock market experience, he had never seen anything like it.
"In the past half a month, how much market history haven't we witnessed?"
Lin Minghui, sitting next to General Manager Deng, looked at the closing situation of both markets with deep emotion.
"Thousands of stocks hitting their lower limit, thousands of stocks hitting their upper limit, from thousands of stocks hitting their lower limit to thousands hitting their upper limit, and then from thousands hitting their upper limit back to thousands hitting their lower limit… Each of these times, wasn't it making history?"
He also had seven or eight years of stock market experience.
But he had never seen such an extremely volatile market trend.
In his memory, even during the 2008 global financial crisis, when the Shanghai Composite Index crashed from 6000 points, there was never such a continuous extreme trend with a complete lack of liquidity.
"Without a doubt, the market is now in a state of stock market crash,"
General Manager Deng sighed helplessly.
He hadn't expected that the continuous bombardment of major positive news over the weekend still couldn't save the market's decline or alleviate the liquidity crunch caused by the continuous stop-losses and forced liquidations of margin trading accounts and off-exchange leveraged funds.
Lin Minghui nodded and said,
"Originally, in such an extreme one-sided downward trend, one could still recover some losses from holdings by shorting index futures. Now… the China Financial Futures Exchange's strict restrictions on individual accounts opening index futures positions truly forces everyone to go into cash."
At this point, Lin Minghui turned his gaze to Su Yi, his eyes revealing a look of gratitude.
If not for following his operations during this recent period.
He probably would have suffered extremely heavy losses in this round of continuous market sharp adjustments.
It can be said that Su Yi saved him tens of millions in losses.
"Brother Su, index futures are now restricted from naked short selling,"
Lin Minghui paused, then continued,
"Next, will you continue to short index futures?"
Su Yi's gaze gradually moved away from the market boards of both exchanges, and he said,
"I will no longer short index futures."
As the saying goes, a gentleman loves wealth, but acquires it in a righteous way.
Now that regulators have strictly forbidden naked short selling of index futures and restricted individual accounts from opening positions, if one were to go against policy at this time, even if money were made temporarily, when the market continues its free fall later, and regulators begin to further investigate malicious short selling.
Not only would all the earned profits be given back, but it is also highly likely that severe penalties would be faced.
Or even imprisonment.
This would clearly be more trouble than it's worth.
Since one has the advantage of rebirth, operating honorably and following policy trends can lead to substantial profits, so why covet so-called risky profits?
Before his rebirth, years of social experience had taught him.
In China, no matter what job one does or what business one runs, the primary rule is to closely follow policies, keep up with the times, and operate honorably.
Otherwise, even if one succeeds by luck for a while, they will eventually be abandoned by the torrent of policies and the era, becoming someone who climbs higher only to fall harder.
This principle, applied to the financial market.
Means one must clearly distinguish what profits should be earned and what profits should not be earned.
"In that case, for the next one or two months, I plan to go into cash and rest,"
Lin Minghui said, seeing that Su Yi had also given up on continuing to short index futures, knowing that under such market conditions, good trading opportunities were unlikely.
"Brother Su, what about you?"
Su Yi replied,
"I'll wait and see. If there are no good trading opportunities, I will also choose to go into cash and rest."
"I also happen to have a business trip coming up for a while, so I probably won't have time to come here,"
General Manager Deng also said at this moment.
"Sigh… the greater the expectation, the greater the disappointment. If this continues, whether the Shanghai Composite Index can hold 3000 points is a question. At this time, going into cash to protect oneself should be the best choice."
After speaking, Lin and Deng chatted with Su Yi for a few more moments and then left.
Su Yi continued to review the market in the trading room for a while before getting up and leaving.
When he walked out of the VIP trading room, in the brokerage business center office outside the branch, numerous brokers were still on the phone.
Amidst the clamor, most conversations were about urging clients to add margin, or notifying them that their margin accounts had reached the forced liquidation warning line.
And in the downstairs lobby of the branch.
Several margin trading clients were demanding an explanation from the manager due to their accounts being forcibly liquidated.
Outside, the entire Financial Street was as bustling as ever, but everyone Su Yi passed had a somber expression, devoid of smiles.
Meanwhile, online…
On major stock discussion communities and forums, the number of people complaining about forced liquidations was also increasing.
Even posts from those who had lost everything due to margin leverage and, in despair, wanted to end their lives, began to gradually appear in the trending topics sections of major stock discussion communities.
Despair, fear, panic, anger…
Numerous negative emotions, after the many positive announcements from regulators failed to save the market's decline, instead causing an even more severe stampede, and successfully crushing the long funds that attempted to buy the dip today, once again enveloped the entire domestic financial market like a storm, spreading through the hearts of hundreds of millions of investors.
Successive positive news failed, successive drastic plunges, successive 'thousands of stocks hitting their lower limit'.
At this moment, all bullish confidence in the market was completely annihilated.
No one believed in a bull market anymore, and no one held any hope for the market.
At this moment, everyone just wanted to escape for their lives.
They just wished their held stocks would not continue to fall with consecutive 'one-line' lower limits.
Even the listed companies themselves, especially those belonging to the ChiNext and SME boards, at this time, facing their own companies' stock prices continuously hitting the lower limit, and the stock prices constantly approaching the forced liquidation line for pledged shares, couldn't help but start to panic, quickly submitting applications to the CSRC (China Securities Regulatory Commission) requesting an emergency trading halt.
To prevent further panic selling in the market and the further spread of the market's liquidity crisis, the CSRC.
Had no choice but to agree to the trading halt applications from these companies one after another.
Thus, overnight.
More than 500 companies in both markets newly announced emergency trading halts.
As for listed companies in the ChiNext and SME board sectors that did not have time to apply for emergency trading halts, after the market resumed trading on Tuesday, July 7th.
Unsurprisingly, they once again encountered market liquidity difficulties, with many continuing straight to the lower limit immediately after opening!
(End of Chapter)
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