The main core indices, namely the Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index, were seen.
They plummeted downwards almost in a flash crash.
With another unilateral plunge of the indices, market liquidity also rapidly vanished.
Countless stocks, whether large-cap core weighted stocks or small and mid-cap concept stocks, all indiscriminately crashed fiercely towards the limit-down.
At the same time, on the major stock index futures boards, the main short selling orders were increasing crazily at a rate of thousands of lots per minute, suppressing the stock indices towards the limit-down position with thunderous momentum.
Noticing that the market had suddenly and completely crashed once again,
Lin and Deng, who were beside Su Yi, were so startled they nearly jumped out of their chairs.
Lin Minghui, in particular, watched as his stock account's intraday profit and loss went from a million profit just tens of minutes ago to an instant loss of over 2 million.
Recalling Su Yi's earlier reminder, he couldn't help but regret so much that he slapped his thighs raw.
Fortunately, he hadn't yet had time to use the remaining funds in his account or increase positions in his margin account.
Otherwise, he would truly be beyond tears at this moment.
"What the hell, what's going on? Even the central bank's interest rate cuts and reserve requirement cuts aren't working?"
Behind Su, Lin, and Deng, a large investor who had just used reserve funds to complete an additional position earlier in the morning looked at the Shanghai Composite Index, which had already plunged by about 4.5% with no signs of stopping, and instantly began to panic,
"We can't even hold 4000 points, can we? This is killing me! Who is selling? It's absolutely insane."
"Oh my god! What's wrong with this market? Where are all these selling orders coming from?"
"Sigh... yesterday it was a 'ground-to-sky board', today it's a 'sky-to-ground board'. The market is absolutely insane."
"I can't understand this trend at all. What exactly went wrong?"
Amidst the complaints occasionally ringing out in the trading room...
As the end-of-day trading time progressed, the Shanghai Composite Index continued its decline, and the market's panic selling intensified.
At this moment, Lin and Deng looked up again at Su Yi's almost frantic continuous short-selling operations, and at the grand total of 100 lots of CSI 500 Index Futures main contract short positions in Su Yi's stock index futures account.
There was no longer any doubt in their eyes, only admiration.
Of course, in addition to admiration,
the two also unhesitatingly began to quickly reduce their stock holdings and followed suit by shorting stock index futures.
Finally, amidst the extremely rapid unilateral plunge in the market's late trading session, and under the emotional display of countless investors' shock, bewilderment, panic, and even fear,
the Shanghai Composite Index closed down 5.23%, barely holding above 4000 points.
Su Yi's heavily shorted 'CSI 500 Index Futures main contract' plummeted by over 6%.
Over 500 individual stocks in both markets hit their limit-down!
The market's closing in such a manner had almost completely swallowed up the rebound gains since yesterday's central bank interest rate and reserve requirement cuts, extinguishing the bullish flame that had just rekindled in the hearts of the vast investor community.
Su Yi gazed at the closing results of both markets, then looked at the total unrealized profit exceeding 10 million in his stock index futures account, feeling very satisfied with today's operations.
"Brother Su, you're still amazing."
Noticing that Su Yi's stock index futures account assets had reached over 30 million, Lin Minghui couldn't help but give Su Yi a thumbs-up in admiration,
"Not only is your judgment on market trends precise, but every move you make is also fast, accurate, and ruthless. Truly impressive!"
He considered himself experienced in stock trading and financial transactions.
At the same time, he knew many people in the Modu financial circle.
Like brokerage investment advisors, institutional analysts, fund managers, folk stock gods, well-known hot money... he had encountered many of them over the years.
But he had truly never seen an investment trader as crazy, yet calm and confident, as Su Yi.
Moreover, for the past half month or so,
since he first met Su Yi in the 'Yinghui Finance' company's trading room, he had never seen him make a mistake.
Such a trading win rate was truly exaggerated.
"Brother Su, at your rate of profit, it won't be long before your assets directly reach nine figures."
While Lin Minghui was speaking, CEO Deng also couldn't help but glance at the intraday unrealized profit of over 10 million in Su Yi's account, his face also filled with admiration,
"Your capital growth rate is practically indistinguishable from robbing money."
Lin Minghui chuckled,
"This is much more exaggerated than robbing money. Even robbing a bank now wouldn't get you 10 million in cash!"
Both their stock accounts were in the red today.
However, because in the last ten-odd minutes of the late trading session, they followed Su Yi's lead and shorted stock index futures,
by the final close, both their intraday results had turned profitable, so they were in good spirits.
After Su Yi exited his trading account and closed the trading software, he turned his head to Lin and Deng and said,
"Extreme market trends won't last forever. Short-selling opportunities like today's unilateral plunge won't be common either. So, huge profits are only occasional. If I want to grow my current capital to hundreds of millions, the difficulty is still very great."
Lin and Deng were both seasoned investors; they knew that the larger the capital size, the harder it was to achieve rapid growth.
Hearing Su Yi say this, neither of them refuted him.
However, they were quite surprised that Su Yi could maintain such a clear understanding even after making tens of millions in massive profits.
"But the market, stimulated by major positive news, failed to rise and instead plummeted. This should indicate that the market's bearish momentum hasn't been fully released, and also that the direction of least resistance for the market is still downwards, right?"
CEO Deng's thoughts suddenly cleared after the closing of both markets, and he shifted from bullish to bearish again,
"If regulators don't continue to strongly intervene in the market, I'm afraid tomorrow's market trend won't be optimistic either."
Su Yi smiled and said,
"I think it's not only not optimistic, but there's a very high possibility of another plunge."
"Why is there still a risk of a plunge?"
Lin Minghui didn't quite understand the logic and couldn't help but ask.
Su Yi continued,
"On today's stock index futures board, during the late trading session, the main short selling orders surged dramatically, forming a clear unilateral selling trend and a situation where long positions were forced to sell.
This indicates that many institutional groups with heavy positions in the market, realizing the market risk, have been aggressively selling stock chips to reduce their positions while simultaneously shorting stock index futures to hedge, in order to rescue the sharp decline in fund product net values and cope with the redemption pressure from off-market fund investors."
"I see."
With Su Yi's explanation, Lin Minghui finally completely understood.
"The comprehensive loosening of bullish market confidence led to the forced withdrawal of leveraged funds, and the withdrawal of leveraged funds exacerbated the market's panic selling sentiment. The spread of panic selling sentiment directly led to even more panic selling.
Ultimately, large numbers of off-market fund investors who realized the risk began to redeem products, and the massive redemption of products by off-market fund investors then led to passive selling by institutional groups in the market, as well as actively shorting stock index futures to hedge, causing market selling pressure to become increasingly prevalent and heavier... My goodness, this is simply a vicious cycle!"
"So..."
Su Yi's eyes gleamed sharply as he smiled and said,
"The domino effect in the market, from the moment regulators demanded the cleanup of leveraged funds and bullish confidence loosened, has actually already begun, and it is completely irreversible. Barring any surprises, an even more brutal market trend might still be ahead."
(End of Chapter)
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