Facing the rapidly expanding losses in the fund's holding accounts, Su Yi remained calm, without the slightest panic.
And Qu Zecai, despite feeling nervous and under immense pressure, still methodically commanded the group of traders in the trading room to continue increasing short selling orders at the current GBP exchange rate, and used the funds Su Yi raised over the weekend to replenish the margin for the main holding accounts.
During the traders' monitored transactions.
During the Asian trading session, GBP exchange rate fluctuations were relatively small, consistently oscillating within the range of 1.5010 to 1.5050.
But once the European trading session began.
GBP exchange rate fluctuations became relatively more intense.
During this stage, the GBP exchange rate attacked the 1.5050 resistance level several times but failed to effectively break through that position.
However, later, during the US trading session in the evening.
With increasingly active market trading and more and more institutions entering the market to go long, the GBP exchange rate finally broke through the 1.5050 level and continued to climb to 1.5070 before re-forming an oscillating trend.
After a night of fierce battle.
When Tuesday, May 31st, arrived, and the market re-entered the Asian trading session.
The 'Huayi Chengyuan No. 1' fund product, managed by Su Yi, holding a total of 85 million USD in GBP short positions, had already incurred losses amounting to 140 million USD.
This also meant...
The approximately 100 million USD that Su Yi raised from various sources over the weekend.
Was wiped out after being invested in the market for merely one day.
Moreover, whether it was Su Yi himself, Qu Zecai, or the company's traders, they could all clearly feel that after the GBP exchange rate broke through the 1.5000 level, a strong upward trend had formed.
In other words, their current positions were going against the entire trend.
"Mr. Su, the loss on our positions has expanded again."
Qu Zecai had just sat down in front of the main control computer in the company's trading room and, looking at the aggregated enormous loss totaling 140 million USD, hurriedly reported.
During this period, his nerves were constantly tense.
Even when resting, it was hard to sleep soundly.
After all, on the fund's holding accounts, there were profit and loss fluctuations of up to millions of USD almost every second.
Coupled with the 100x leverage on the forex contracts, he was truly afraid that something unexpected would suddenly happen in the market, and the fund's positions would instantly be liquidated.
"Hmm, it's fine. This loss was already within my expectations."
Su Yi said with a smile.
As he spoke, Su Yi smiled and glanced at Qu Zecai.
Seeing his bloodshot eyes, he couldn't help but ask,
"What's wrong, Manager Qu, didn't you sleep well last night?"
"Indeed, I didn't sleep well,"
Qu Zecai coughed lightly and replied,
"Perhaps I haven't adapted to Hong Kong's weather yet."
Su Yi nodded slightly and said,
"Then you'll have to adapt quickly; there are still tough battles ahead."
Qu Zecai acknowledged, and then his gaze returned to the trading screen.
He felt that even he, an experienced veteran asset manager, facing such massive positions and high leverage, would inevitably be nervous and uneasy.
He didn't understand why Su Yi could be so calm.
Of course, although he didn't understand, he truly admired Su Yi from the bottom of his heart.
Betting hundreds of millions of USD, his entire fortune, on the highly uncertain GBP exchange rate, yet still remaining composed and chatting freely, this was definitely not something an ordinary person could do.
As the two spoke...
Wang Huaijin walked into the trading room and reported to Su Yi,
"Mr. Su, the latest news is that 'Tianhe Capital' has also entered the market, and... I heard the Bank of England again sold foreign currency, conducting market transactions."
"Hmm,"
Su Yi nodded.
"Are there any other important updates?"
Wang Huaijin thought for a moment and then said,
"There's a rumor, it seems the British public is very dissatisfied with the stagnation and decline of the British economy in the past two years and are clamoring to break up with the EU, which is quite ridiculous... It's not like dating where you can just break up whenever you want, is it?"
"Oh?"
Su Yi smiled and said,
"The fact that such sentiments can be spread indicates that some people within the British cabinet are also dissatisfied, and these rumors probably haven't just emerged recently, right? When these voices grow louder, many people will no longer be able to ignore their existence."
"Is Mr. Su saying... there's an opportunity here?"
Wang Huaijin asked.
Su Yi responded,
"When the landlord's family also has no surplus grain, they naturally won't be able to care for their poor relatives around them."
"Does Mr. Su think this matter will escalate?"
Qu Zecai asked, turning his head at this moment.
Su Yi said,
"Whether it escalates or not, we'll just wait and see. In any case... this news cannot be ignored. Mr. Wang, have someone continuously track and gather information on this matter to see what response and progress the British cabinet will have."
According to the historical memories in his mind.
June 23rd was the day of the UK's Brexit referendum.
He calculated the time and felt that by this point, under constant public pressure, the British cabinet should also be initiating the corresponding internal procedures for the referendum.
Of course, regarding the rumors about public dissatisfaction, believing that a bunch of poor relatives within the EU were dragging them down from having a good life, being able to cross thousands of miles of ocean and reach Hong Kong, Su Yi believed that this was certainly very close in time to the British cabinet initiating the national referendum procedure.
"Okay,"
Wang Huaijin acknowledged.
Su Yi nodded slightly, pondered for a moment, and then asked,
"Mr. Wang, at this moment, according to publicly available market information and data from major exchanges, what are the positions of the major institutions on the GBP exchange rate?"
Wang Huaijin said,
"From the relevant information and data I've gathered, currently, in the GBP exchange rate market, our institution still holds the largest short positions, accounting for over 9% of the market's total short positions.
As for long positions, the 'Huanyu' hedge fund of Huifeng Global Asset Management holds over 30,000 long contracts, a hedge fund under 'Pacific Capital,' and the foreign exchange investment department of 'Goldman Sachs' Group both hold over 20,000 long contracts...
In summary, major global investment institutions are basically our counterparts. Oh, and..."
Wang Huaijin paused and continued,
"What's quite strange is that 'Jinhualun No. 1' hedge fund of 'Aberdeen Asset Management' actually holds over 10,000 GBP short contracts. This is currently the only internationally renowned investment institution whose judgment aligns with our institution's direction and holds a massive short position."
"'Jinhualun No. 1' fund of Aberdeen Asset Management?"
Su Yi pondered for a moment and asked,
"Is the fund manager of this fund Mr. Frederik?"
Wang Huaijin said somewhat surprised,
"Mr. Su knows this person?"
"I've heard of him. During the past 'Swiss franc Black Swan' event, this person had a rather legendary operational performance. Since it's a fund managed by him, then it's not strange. It seems... in this world, there are still quite a few truly intelligent people capable of foreseeing opportunities."
Su Yi said.
And just as Su Yi was expressing his thoughts...
In Hong Kong, inside Aberdeen Asset Management's branch office, in the 'Jinhualun No. 1' hedge fund trading room.
After reviewing the long and short main institutional position data for the current GBP exchange rate in the researcher's hand, Frederik couldn't help but have many questions about the massive holding of over 85,000 GBP short contracts by the 'Huayi Chengyuan No. 1' fund product managed by Su Yi.
He didn't quite understand why the other party, under massive losses, made no arrangements for position reduction or stop-loss.
"Dennis, you said you've met this Mr. Su from 'Huayi Capital' before?"
Frederik, carrying the questions in his mind, turned to the fund's core trader, Dennis, whom he believed had great future potential and was very talented in trading, and asked,
"What kind of person do you think he is?"
Although he was not the opposing side's capital.
But upon discovering that the other party's positions were so unusual, he still wanted to learn more about this so-called 'teammate'.
Dennis thought for a moment and responded,
"He seems like a very polite and very intelligent person, with deep insights into various derivative trading products in the financial market and trading itself. Moreover, this guy, in China's A-share market, once created a myth of a hundredfold return in half a year."
"Why do you think he's making such a large-scale move and so persistently shorting the GBP exchange rate?"
Frederik asked.
"More than twenty years ago, Soros dared to short the GBP exchange rate because he accurately assessed the limited foreign exchange reserves of the Bank of England, and with a global economic crisis approaching, there was a clear bubble in the GBP exchange rate. But now the situation is completely different, and this Mr. Su doesn't seem to have the ability to sway the Bank of England."
Dennis pondered for a moment and said,
"Although it's hard for me to guess his motives for doing this, I believe... he definitely made this decision after careful consideration. Perhaps regarding the GBP exchange rate's outlook, there are still major potential negative factors that we haven't anticipated or seen."
"What negative factors could that be?"
Frederik thought for a moment but still felt he had no clue.
"Then, teacher... what is your motive for having us short the GBP exchange rate?"
After a pause, Dennis retorted.
Frederik smiled and said,
"Firstly, the UK's economic growth performance in the next one or two quarters, or even this year, will be very poor. Secondly, purely from a trading perspective, the market will never allow the vast majority of people to make money.
Currently, there are so many net long positions in the GBP exchange rate market that once there's any slight movement in the news, the longs will close their positions and cover, and then the GBP exchange rate will significantly decline. Moreover, the 1.5000 exchange rate level is not that easy to hold.
Furthermore... the inherent purpose of the Bank of England is to maintain exchange rate stability, not to rapidly appreciate the currency."
"Hmm, I think so too. I think 'Huayi Capital' investing heavily to short the GBP exchange rate this time and creating such a big stir is like setting a huge trap in the GBP exchange rate market to lure in numerous long institutions."
Dennis said.
"Oh? Your way of putting it is quite novel,"
Frederik laughed.
Dennis scratched his head and said,
"I'm just guessing. I always feel that in the current market, everyone's expectations seem too consistent, which might not be a good thing in the financial market."
"Hmm, consistent expectations are often hard to achieve,"
Frederik nodded.
"Teacher, then according to you... are we going to continue to increase our short positions on the GBP exchange rate?"
Dennis asked.
Frederik said,
"There's no need for that. A 10 million USD position is quite substantial for us. Let's first observe the subsequent shifts in market expectations and news developments. If there truly is any long or short trap here, it will definitely, over time, slowly reveal its traces."
Having said that, Frederik's gaze shifted from the institutional position data submitted by the researcher.
To the continuously trading and fluctuating GBP exchange rate.
After continuous long and short trading in the market, the GBP exchange rate at this time remained oscillating around the 1.5070 level, facing considerable resistance whether moving up or down.
However, as market trading hours.
Continued past the Asian session and entered the European and US sessions.
Especially when many institutions heard that the largest short position at the moment, the 'Huayi Chengyuan No. 1' fund with 85,000 short contracts on the GBP exchange rate, was already on the verge of liquidation.
More and more speculators and institutional groups began to accelerate their entry into long positions, continuously pressing the shorts.
With the further pressure from the longs.
The GBP exchange rate once again broke through its oscillation range, accelerated its ascent, and when Wednesday, June 1st, arrived, it pushed the exchange rate to the 1.5100 level in one go.
However, just as the 'Huayi Chengyuan No. 1' fund product managed by Su Yi.
When the GBP exchange rate broke through the 1.5100 level, and the total loss on 85,000 standard contracts reached 170 million USD.
On the news front affecting the GBP exchange rate, important news finally arrived.
During the European trading session on June 1st, around 6 PM, a British cabinet meeting was convened to review the matter of a 'national referendum on Brexit' proposed by various regions.
As soon as this news broke...
The GBP exchange rate immediately dropped from its intraday high of.
1.5129, plummeting to around 1.5023, a flash crash of over 100 basis points.
Thanks to the plummeting GBP exchange rate, the 'Huayi Chengyuan No. 1' fund product managed by Su Yi also saw its position losses rapidly reduce by over 50 million USD.
However, the brief plummet did not truly affect the trend of the GBP exchange rate.
Nor did it reverse the actual long and short dynamics.
After the news was announced, major global investment institutions and renowned investment research institutions all interpreted the British cabinet's review of the 'national referendum on Brexit' matter.
98% of globally renowned institutions.
All believed that the British cabinet would not pass this proposal, and that no matter how subsequent events unfolded, the probability of Brexit was zero.
Due to the unanimous expectation of the vast majority of global institutions.
The market's longs launched a strong counterattack near the 1.5000 GBP exchange rate level.
This led to the GBP exchange rate fully recovering its losses and returning to the 1.5129 level even before the evening US trading session began.
"Haha... with this trend in the GBP exchange rate, 'Huayi Capital,' as the main short seller, must be on the verge of collapse, right?"
Seeing that after the negative news stimulus, the GBP exchange rate returned to a high and continued its upward trend, Gu Chijiang, from the Gu family in Hong Kong, who had already entered the market with large long positions through 'Tianhe Capital,' felt quite pleased in the Gu family's villa and said with a laugh,
"If this trend continues and Mr. Su of 'Huayi Capital' doesn't close his positions with a stop-loss, I'm afraid he'll have no burial place."
"It seems this time the Fangjia... bet on the wrong person."
Gu Huaming at the side, hearing his father's words, was also very happy.
Gu Chijiang nodded slightly, his gaze gradually sharpened:
"No matter what, the upward trend of the GBP exchange rate has already formed, and on the charts, the longs have achieved a crushing momentum. Coupled with the dovish remarks from the Federal Reserve, weakening interest rate hike expectations, the USD will definitely be weak for a period. In this way... this will create even stronger upward momentum for the GBP exchange rate.
In any case... no matter how you look at it, this Mr. Su will not be able to withdraw unscathed."
(End of Chapter)