Facing the sudden continued flash crash of the pound exchange rate, the long-short trading volume on the floor erupted once again.
Countless speculative long position holders rapidly reduced their positions to stop losses, while a massive number of speculative short position holders continuously poured in significant capital to force liquidation.
"Mr. Godfrey, this trend isn't right, completely wrong."
Noticing that the pound exchange rate at the 1.4500 level was already precarious, in Hong Kong, at the trading room of Huifeng Global Asset Management Universe No. 1 main hedge fund, Gerald, the head of the trading team, felt his heart rise to his throat.
He nervously gripped the keyboard, slid the mouse to the one-click close position button option on the trading account, and quickly reported to Godfrey.
At this moment, Godfrey was also staring intently at the pound exchange rate's market trend, his expression indescribably grim.
The successively announced voting results from Swindon, as well as Northamptonshire, Southampton, and South Tyneside, were almost all below the initial global institutional expectations at the first count.
Furthermore, the number of people supporting Brexit completely exceeded previous market predictions.
This caused the long-short sentiment on the floor to completely lean towards the short side.
And in an instant...
The unrealized loss of the main fund product he managed expanded to nearly 800 million US dollars.
Such a massive loss was unprecedented since he took charge of the 'Huifeng Universe No. 1' main fund product.
However, more critically, the flash crash market trend had completely deprived them of the opportunity to calmly reduce positions, close positions, and cover them to control losses.
"Mr. Godfrey, market sentiment has completely shifted towards the shorts. While the Brexit results haven't been fully finalized, and while there are still some long positions to take on the current market..." Ernest, head of the asset management business market research department, urgently suggested, "Why don't we execute a large-scale, concentrated stop-loss at this point? It's still not too late to stop losses now. If we hesitate further, as more referendum voting results are announced, and as more and more voting districts lean towards Brexit, the pound exchange rate will continue to plummet, and the long position buying power will quickly weaken again. Then we... I'm afraid we won't be able to complete a quick, concentrated stop-loss."
At this moment, even though the pound exchange rate had fallen to the 1.4500 level.
It had fallen by nearly 400 points compared to before the referendum vote counting.
However, the accumulated open long positions on the floor still amounted to a massive 4 million lots.
This means there were still far too many long-position holding capital groups on the floor that had not covered their positions or managed to stop losses and withdraw.
If subsequent market conditions continue to align with short expectations.
If this massive group of long-position holding capital on the floor further concentrated on covering positions to stop losses.
Then, it is easy to foresee that an even more severe extreme long position stampede will occur in the pound exchange rate market than now.
A more brutal situation of longs killing longs is bound to happen.
Moreover, at a time when large numbers of long positions' confidence collapsed and they rushed to cover their positions to stop losses.
There was also continuous short capital, as well as countless newly entering short speculators, greatly increasing short positions and continuously suppressing the market trend.
In other words, if the number of people supporting Brexit in the subsequent referendum voting results announcements.
Doesn't see a decisive turnaround.
This position of the pound exchange rate could absolutely not be the end of this round of decline.
Just as Ernest was speaking, on the fiercely traded market, the pound exchange rate had unhinderedly broken through the 1.4500 mark, continuing to rapidly dive over 50 points, plummeting directly to around 1.4445, once again hitting a new three-month low and a three-year low.
At the same time, when the pound exchange rate fell to this level...
A large number of long institutions on the floor whose long positions had a holding cost above the 1.5000 level, especially those with insufficient reserve funds or overly high positions, had begun to face margin calls and forced liquidation.
"Mr. Godfrey, our fund's unrealized loss is nearing 900 million US dollars," Gerald continued to report urgently. "With our current number of short positions, we are less than 300 points away from the system's mandatory stop-loss liquidation line."
Godfrey heard Gerald's words and remained silent for a moment.
He gritted his teeth, his eyes continuously fixed on the pound exchange rate trend, remaining silent for about half a minute before turning his gaze to Jeremy, the head of the company's intelligence department, and asked, "Are there any latest important updates from the Bank of England? Also, what are the latest results for the more important core regions like London, Manchester, Leeds, Glasgow, etc.? Can we get advance notice?"
Jeremy quickly replied, "Currently, there are no significant new updates from the Bank of England. It seems that internally, the Bank of England and the central bank committee have abandoned their original plan to strongly support the pound exchange rate, and have also abandoned their plan to target Wall Street short capital in the pound market.
As for the voting results from core regions like London, Manchester, Leeds, Glasgow, etc. We currently have no way to obtain them in advance.
After all, this is publicly broadcast vote counting, and all voting districts are counted independently and announced independently. The relevant vote counting results are synchronized globally, so there's no way to disclose them to us in advance.
Based on the large number of voters in these major districts. It is estimated that the results for these highly anticipated core districts will be announced around 9:30 AM or after 10:00 AM Beijing time."
"The Bank of England abandoned its original strategic plan?" Godfrey was visibly shaken, his head buzzing, finding it hard to believe. He couldn't help but curse, "These guys are just like UBS back then, fleeing in the face of battle, completely lacking vision and credibility."
"Mr. Godfrey, we need to make a decision quickly!" Ernest urged.
"An 80,000 lead is actually very small within a population of 50 to 60 million," Godfrey said, gritting his teeth. "With the subsequent announcement of vote counts from major core regions, there's still a high probability that the number of 'Remain' supporters could overtake."
"Indeed, we cannot rule out that possibility," Ernest said, "But we don't have time, nor do we have any room for error. Once the pound exchange rate flash crashes by another 300 points, even if the final referendum result reverses, it will no longer matter to us after our fund has been fully liquidated and stopped losses.
Therefore, regardless of what the subsequent core district vote counts reveal. At this moment, we must concentrate on reducing positions and covering them, lowering our holding risk, and increasing our tolerance for error."
"Sigh..." Hearing Ernest's voice, Godfrey, despite his immense reluctance, could only sigh helplessly.
He instructed the trading teams to immediately and collectively reduce one-third of their long positions to lower the extreme risk of concentrated holdings and increase the fund's reserve capital flow, in case of a sudden liquidation risk caused by another flash crash of the pound exchange rate.
"Being forced to stop losses and close positions at this level, it's truly a damn shame."
Unconsciously, he couldn't help but curse.
Ernest, hearing Godfrey's final decision and seeing the pound exchange rate already hovering around 1.4430, finally breathed a sigh of relief.
And Gerald dared not hesitate for a moment.
He quickly closed one-third of the long positions in the account at market price and simultaneously conveyed the relevant trading instructions to the remaining traders.
Just as Godfrey reluctantly carried out the partial position covering and stop-loss operation for the 'Universe No. 1' main hedge fund.
Mitsui Sumitomo Hong Kong City Investment Company and Tianhe Capital, institutions that had originally linked with the 'Universe No. 1' main hedge fund on the pound exchange rate market, their respective investment managers, Sato and Gu Chijiang, now watched their severely loss-making fund trading accounts, their long-position confidence also completely collapsing.
Gu Chijiang, during the continuous decline of the pound exchange rate, reduced positions and stopped losses all the way, yet his trading account losses continued to expand, completely shattering his belief in going long on the pound.
As for Sato...
At this moment, apart from the forced stop-loss and position covering operations, only despair was visible on his face.
The main fund product he managed had already lost over 500 million US dollars in the pound exchange rate market.
Losses of this magnitude essentially signaled the end of his career.
Of course, besides 'Huifeng Universe No. 1', 'Mitsui Sumitomo Hong Kong City Investment Company', 'Tianhe Capital', and other main long institutions whose holding and long-position confidence had collapsed.
Worldwide...
The Wall Street long capital that had heavily invested in long positions before, as well as a group of European long capital.
Such as the American 'Vanguard Capital', British 'Pacific Capital', 'BNP Paribas'... and other major long institutions globally, their holding confidence and long-position confidence were also continuously collapsing.
Within each institution, fund managers who realized something was wrong were also continuously executing stop-loss reductions.
The concentrated stop-loss reductions and covering by long capital, and the concentrated influx of speculative short funds.
Caused the open long positions on the floor to rapidly drop to over 3.9 million lots when the pound exchange rate probed the 1.4400 level, while open short positions climbed to around 5.2 million lots.
And as the net position quantity on the floor completely shifted towards short positions.
Amidst the panicked stampede of long positions.
As core major long institutions on the floor.
Within institutions such as 'Citibank', 'BNY Mellon', 'Goldman Sachs Group', 'Blackstone Group', 'Aberdeen Asset', 'Huayin International', 'Huayi Capital'... the managers of relevant main fund products, and the various trading teams participating in this round of trading, numerous traders.
At this moment, their mood was extremely uplifted and excited.
Among them, Humphrey, the foreign exchange market hedge fund manager at 'Blackstone Group', at this moment of extremely tense market trading, at around 8 PM American time, placed an international call to inform Frederick, the main fund product manager of 'Aberdeen Asset Evolution No. 1', of his joy.
"Old friend, your strategy to lead the shorting of the pound this time is truly perfect," Humphrey laughed loudly on the phone. "At this very moment, my institution's unrealized profit has reached 480 million US dollars, and I can assert that this is not the end, but merely the beginning."
Frederick received Humphrey's call and responded with a smile, "Congratulations. At a critical moment, seeing through the market's essence and switching from long to short is not something an ordinary person can do."
"Haha..." Humphrey continued to laugh, saying, "It's all thanks to your reminder. Your institution probably made a big profit this time too, right? When you're back at the New York headquarters, I'll treat you to a meal."
"Not bad, currently over 1.9 billion US dollars in unrealized profit," Frederick said with a smile.
"Holy crap..." Humphrey's heart was greatly shaken upon hearing the figure Frederick reported. "You really went all out. This earth-shattering battle of yours seems destined to make you famous across Wall Street."
Frederick smiled and said, "Actually, I wasn't the first to discover this massive short-selling speculative opportunity that ignited this long-short battle in the pound exchange rate market. I merely followed suit. The true initiator of this round of long-short battle in the pound exchange rate market should be Mr. Su Yi, the principal of the Chinese-funded institution 'Huayi Capital', and also the fund manager of 'Huayi Chengyuan No. 1' main hedge fund product."
"Huayi Capital?" Humphrey paused, then replied, "Haven't heard much about it, and... who is Su Yi?"
Frederick said, "It's normal that you haven't heard of it, but... after this round of the UK referendum, this institution is probably going to become famous in the international financial community."
Accompanying their conversation...
The market had already announced the final voting results for several more voting districts.
What was continuously surprising was that these successively announced voting results from several districts still leaned towards supporting Brexit, and as soon as these district data were released.
It directly led to the number of people supporting Brexit further exceeding the number of people supporting Remain.
And the gap between these two numbers had already widened to over 100,000 people.
Facing such results, the pound exchange rate trend continued to fall almost without stopping, breaking through both the 1.4400 and 1.4350 defense lines.
In an instant, it continued to refresh new lows to 1.4339.
And at the moment the pound exchange rate fell to 1.4339.
The 'Huayi Chengyuan No. 1' main fund product managed by Su Yi, with its fund holding a massive 300,000 short positions, had seen its total unrealized profit just cross the 1.5 billion US dollar mark, achieving its goal of doubling all invested capital and also reaching its investment target of ten billion Huabi.
Facing the immense unrealized profit figures in the fund's aggregated account on the main control computer.
Su Yi could still maintain his composure and calmness.
However, Qu Zecai, as the trading team manager, was utterly astonished, his entire being in an extremely excited state.
Meanwhile, off-market, at the Risk Investment Department of 'Aberdeen Asset' in Hong Kong.
Fang Wanqing, who was at work, gazed at the pound exchange rate, which had completely formed a long-killing-long situation and a one-sided short trend, her expression incredibly excited, her eyes and brows full of smiles.
(End of Chapter)