Chapter 30 Shorting the Market!
"...The current market situation is that almost all hot money is rushing into A-shares."
Inside the meeting room, senior trader Liang Haiyuan spoke first, kicking off the new team's first formal meeting.
The core members of the newly formed seventh team sat around the long conference table.
In addition to Su Hao, the new team manager, there are also:
Senior Trader Liang Haiyuan, three full-time traders, and one trading assistant.
There were exactly six people, no more and no less.
Liang Haiyuan had clearly made ample preparations. He pulled up several charts, projected them onto the screen in front of him, and calmly analyzed:
"Manager, you should also be aware that the previous prolonged slump in the A-share market has been followed by a series of policy measures from the management. The central bank announced a 0.5 percentage point cut in the reserve requirement ratio, releasing approximately 1 trillion yuan in long-term liquidity. Simultaneously, it created tools such as the'Securities, Funds, and Insurance Companies Swap Facility' and the'Special Re-lending for Stock Repurchase,' injecting an initial 800 billion yuan in liquidity to support the stock market..."
The chart on the screen, with its steep, almost vertical upward curve, was visually striking.
Liang Haiyuan continued, "Currently, the market has the potential for a rebound after being oversold. Policy support combined with low valuations is driving a short-term valuation recovery. The daily turnover of A-shares has now exceeded one trillion yuan, while the turnover of Hong Kong stocks has also exceeded 410 billion Hong Kong dollars during the same period, indicating that domestic and foreign funds are accelerating their entry into the market..."
"My suggestion is that we should also establish positions as soon as possible to capitalize on this surge!"
Liang Haiyuan's tone carried a hint of urgency:
"With such a significant positive development, a sustained surge in the market is practically a certainty! If it drives economic recovery, basic raw material industries such as steel are worth paying attention to. For related sectors, short-term trading with quick entries and exits should present good opportunities."
Members from other departments also shared their opinions, one after another, and the focus of the discussion was highly unified.
That is:
Take advantage of the better-than-expected benefits released by this combination of policies and enter the market to build positions as soon as possible!
The earlier you get in, the more benefits you can reap!
If you're even a step too late, you might not even get to drink the soup!
Su Hao listened silently, his fingers tapping lightly on the table unconsciously.
'Fortunately... I had taken some time to study some related materials beforehand,' he thought to himself.
Indeed, not only this time, but also in previous research reports, this has been repeatedly emphasized:
Currently, multiple factors, including policy, liquidity, valuation repair, and foreign capital inflows, are resonating together.
The overwhelming amount of data is all pointing in the same direction.
Although some negative voices have emerged sporadically, warning of risks, the mainstream expert opinion is currently:
With the rapid rollout of policies, my country's stock market is poised for a bull market boom!
"Look, now it's not just our company's internal research department, but also all the investment experts and analysts outside, they're almost all bullish!"
Liang Haiyuan was somewhat agitated. "Some people are even saying that the market will soon surge to 4,000 points, and it's entirely possible that it will reach 6,000 points in the future!"
Indeed, there is an almost fanatical optimism permeating the market.
Some even believe that the future global economic trend will no longer be driven by the traditional US market, but by the massive and potentially limitless Chinese market!
In this situation, the safest and smartest approach is to follow the crowd.
Go with the flow.
Isn't this the very purpose of research departments?
Find the strongest current trend, then tell everyone to follow this trend and soar together.
'But…' Su Hao frowned slightly.
Why... do I feel like something's not quite right? It's like... I don't really have any particular 'feeling'?
Perhaps it's because this choice is too "correct" and too "obvious"?
It was like a freebie question; the answer was written all over his face, which made him lose the excitement of catching his prey.
He composed himself and prepared to make a decision.
As a team manager, he needs to give clear instructions.
"Okay, then we..."
He cleared his throat, just as he was about to issue his first strategic directive—
'Um?'
His gaze inadvertently swept over a pile of documents scattered on the conference table. One of them, which he had casually flipped through and paid no attention to before, suddenly attracted his attention like a magnet.
The title of the document was written in bold black font:
[Analysis of Current Negative Factors in the A-Share Market]
This document is not bearish on A-shares; it is more like a risk warning, or a routine "reference material" added by the research department to appear "comprehensive and objective."
Therefore, Su Hao had only glanced at it briefly before tossing it aside.
"..."
However, at this moment, as if drawn by some invisible force, he reached out and picked up the thin document again, almost as if possessed.
The slightly rough texture of the paper was transmitted through my fingertips.
His gaze fell on the names of several varieties listed in the document:
[Buy put options on CSI 300 index futures]
[Buy put options on SSE 50 Index futures]
[Buy put options on CSI 500 index futures]
Without exception, they are all option derivatives used to hedge against the risk of a decline in A-shares.
At the same time, in the current frenzied market environment, anyone who buys it will lose money, and it is regarded as a "garbage" or "trap" product, so the price is very cheap.
Normally, if he saw something like this that was "for reference only," he would definitely ignore it without hesitation.
but...
"...!"
But why?!
Why was it that just as his fingertips touched the paper, and his gaze locked onto the names of those products…
An indescribable, extremely intense sense of dread, without warning, like an electric current that had been accumulating for millennia, suddenly shot from his tailbone straight to the top of his head! It instantly swept through his entire body!
The feeling was so clear, so intense!
It was so intense that his knuckles, gripping the paper, turned white from the excessive force!
It was so intense that the hairs on his entire body stood on end instantly!
A chilling yet deadly premonition exploded in his heart like a tsunami!
" Manager Su?"
Li Huilin's voice was clear and crisp, carrying a perfectly timed reminder, like a precise needle that instantly pierced Su Hao's reverie and pulled him back to the reality of the conference room.
He slightly raised his eyelids and refocused his gaze.
During his time working his way up in the company, Su Hao finally figured out the details of his special 'talent'.
His so-called 'intuition' was neither a sixth sense that arose out of thin air, nor was it a baseless guess.
It's more like a highly customized information processing organ.
He needs to be fed enough relevant data as 'nourishment' before the mysterious black box system in his brain can operate at high speed.
After analysis, organization, and summarization, a final "ding" sounded, pushing the condensed conclusion to the forefront of his consciousness in an incredibly clear "feeling" form.
An early warning system based on massive amounts of data, yet presented through instinctive intuition.
At this moment, his warning system was flashing red lights frantically, and the alarm was practically blaring in his mind, telling him in the most straightforward and undeniable way:
Short sell! Short sell hard!
"So... what the manager means is that the A-shares, which we've repeatedly analyzed and unanimously predicted would rise, will suddenly turn downwards, and the market will completely reverse?"
Li Huilin cautiously sought confirmation, her tone filled with disbelief.
The other members also cast shocked glances at them, their expressions complex.
"Wow, there's such a huge positive development right now, but to say that it will plummet soon... isn't that a bit too... too hard to imagine?"
"Yes, manager, our research department's report is very optimistic; they all think it can reach at least 4000 points!" another member chimed in, sounding even more confident.
"Isn't it too early to predict that it will fall? Wouldn't we suffer huge losses if we missed the opportunity?"
Su Hao knew exactly what was going on.
Logically speaking, this group's analysis is indeed impeccable.
To be honest, even Su Hao, who might be considered somewhat mediocre in terms of financial knowledge and practical experience, would find it difficult to judge based on his own perspective without any external advantages.
It must be admitted that the current A-share market is simply a money tree that exudes the scent of wealth.
It seems that as long as you close your eyes, throw in all the available funds, and follow the crowd, you can easily experience the ultimate pleasure of counting money while lying down.
Liang Haiyuan finally couldn't hold back any longer and, with a complicated look in his eyes, tentatively asked the question that made the air in the conference room freeze instantly:
"Manager, you...you don't actually think...the A-shares are going to fall, do you?"
brush--!
In an instant, everyone's gaze in the conference room, like a dozen high-powered searchlights, focused on Su Hao's face.
His eyes were filled with surprise and panic, as if to say, "No way?!" or "I even used my secret stash of money to buy things!"
Faced with a group of subordinates who seemed on the verge of collective heart attacks, Comrade Su Hao displayed a composure that was completely inconsistent with his resume.
He didn't even look up, but simply uttered a single word in a flat tone, stating an objective fact rather than expressing a subjective opinion:
"right."