Rebirth of the Financial Crisis Sweeping the World

  Chapter 20: Short 6 million shares of Tianye Liushui Company!

  Huang Haifei thought for a while: "Mr. Wang, your capital has exceeded 1 million. I can apply for up to 6 times the funding for you."

Their Wing Hang Securities Company is only a small securities company. There are also regulations for capital allocation. They dare not allocate too much to customers. Wang Guanxi’s capital has exceeded 1 million. If there is capital allocation, he needs to apply to his superiors. He himself does not have this power.

   "Six times?" Wang Guanxi tapped the table lightly. He wanted to fund 10 million, but it didn't seem to work.

  "6 times is 6 times, you can give me a 6 million account right away"

  Huang Haifei hurriedly said: "Mr. Wang, wait a moment, I'll talk to the manager."

  This time the allocation of 6 million yuan, the interest is also very high, and his commission is also a lot, and he has to help Wang Guanxi apply for everything.

   "Well, go and come back soon" Wang Guanxi continued to drink tea.

  A few minutes later, Huang Haifei returned.

   "Mr. Wang, see you by Jing Ideal, you can talk to him personally."

"Well!"

Then Huang Haifei took Wang Guanxi to an office. Here sat a black suit, a long-faced man with a stroke. He was about 24 years old and energetic. Seeing Wang Guanxi, he quickly got up, walked over enthusiastically, and stretched out his hand. Said: "Mr. Wang, here you are, my name is Feng Shaokun, the manager of Wing Hang Securities Company"

  The Wing Hang Bank behind Wing Hang Securities Company belongs to the Fung family, and Feng Shaokun is the younger generation of the Fung family.

  "Hello, Manager Feng" Wang Guanxi shook hands with him.

  "Come, please sit down"

  So Wang Guanxi sat down.

  "Xiao Fei, have tea"

  "Yes, the manager" Huang Haifei hurriedly left.

  While drinking tea and chatting, Feng Shaokun inquired about Wang Guanxi's family situation, but Wang Guanxi didn't mention a word.

  He asked curiously: "Mr. Wang, do you really plan to allocate 6 million shares for stocks?"

  Wang Guanxi is only 16 years old, a high school student, I don’t know if his parents know?

  You need to know that it’s easy to lose money when you do stocks. It’s normal to be trapped. By that time, a 16-year-old child will lose a lot.

  As soon as it hits the news, they Wing Hang Securities Co., they will be in disrepute.

   "Well, yes, with a capital of 6 million, to do a stock, is there a problem with Mr. Feng?" Wang Guanxi took a sip of tea, and then Feng Shaokun poured tea for him again.

   "Mr. Wang, this is indeed no problem."

  "However, you have to write a statement. Your loss-making company does not matter. Everything is determined by you. We have never instigated you to invest in stocks. Can you do this?"

  One thing happened in Hong Kong. A second-generation rich man, who played stock market, still allotted capital. The result was a big loss. At this time, it was in the news that it was the securities company who instigated the little boy to stock market.

   "There is no problem with this" Wang Guanxi gently put down the tea cup: "Let's follow the pen with the paper."

"Ok."

  Feng Shaokun then brought paper and pen, and then Wang Guanxi wrote a statement stating that his losses are his own responsibility, and the allocation of capital is his own decision, which has nothing to do with Wing Hang Securities.

  Feng Shaokun read the statement that there was indeed no problem, so he took the funding contract and asked Wang Guanxi to sign it.

  After signing the contract, Wang Guanxi paid a risk deposit of HK$1 million, paid a lump-sum interest of HK$60,000, and obtained a HK$6 million account from Wing Hang Securities.

  "Mr. Wang, happy cooperation in advance"

   "Happy cooperation!"

   Then Wang Guanxi said again: "Manager Feng, I plan to short a stock. Does your securities company provide securities lending?"

  The so-called “short” means that when you expect a stock to fall in the future, you sell the stocks you hold at the current price and wait until the market falls before buying in order to obtain a profit from the spread. To put it simply, it means borrowing and selling, and then buying and returning it.

  And Hong Kong stocks can be shorted, and short-selling Hong Kong stocks are generally institutions, not individual investors. After all, individual investors are a vulnerable group in the stock market. If individual investors participate in short-selling, the risk is considerable and it is easy to suffer losses. Even for market makers, the short-selling mechanism is very risky.

  As for short-selling Hong Kong stocks, small and medium-sized investors are very cautious and basically will not participate in short-selling.

To short-sell Hong Kong stocks, they must be sold through securities lending, that is, the investor’s account-opening brokerage firm must have corresponding stocks available for short-selling. Short selling is also in vain.

  The short selling of Hong Kong stocks has requirements for the amount of funds. A minimum deposit of 50w is required in the account.

  After that, go to the market through the brokerage to borrow the goods and sell you short. After making a profit. You buy back the stock again.

  The handling fee is high, the borrowing requires interest, and not all stocks can be shorted.

  There are also many stocks that you cannot borrow in the market.

  Feng Shaokun asked quickly: "Mr. Wang, are you going to short that stock?"

  Wang Guanxi said: "Tianye Flowing Water Company"

  Before, his financial news caught a mainland listed company in Hong Kong, named Tianye Flowing Company.

   is a company mainly engaged in the manufacturing and sales of irrigation systems and equipment.

  Now its stock price has risen from 3 yuan per share to 4 Hong Kong dollars per share, with a total share capital of 500 million shares and a market value of 2 billion Hong Kong dollars.

  The company’s stock price will soon be hit hard by a large-scale engineering accident. The stock price has plummeted and its market value will drop to 200 million Hong Kong dollars in the future!

  So Wang Guanxi should short its stock.

  But short his stock, you can’t go short naked, you need to borrow the stock from other securities firms, sell it first, and then buy it.

  Feng Shaokun was taken aback, "Tianye Flowing Water Company?"

  Wang Guanxi nodded: "Yes, can you borrow from Yongheng Securities Co., Ltd.?"

  Feng Shaokun: "Yes, this is no problem, but the handling fee and interest are quite high. Are you sure you want to become a Kongtianye Flow Water Company?"

Securities firms and financial institutions usually hold many stocks of listed companies, and then lend them to short sellers, charging fees and interest. However, if the stock price really plummets, the securities firm will lose money, and short selling is equivalent to opposing the securities firm. Bet, they Wing Hang Securities Company does not have the shares of Tianye Liushui Company, but they can help Wang Guanxi borrow them in the market and collect intermediary fees.

  Wang Guanxi nodded: "OK"

  Feng Shaokun: "OK, no problem, I will call Wing Lung Securities Co., where do they have Tianye Liushui company stock, they can lend you short!"

   "Thank you then."

  The next day, March 11, Tuesday morning.

  Wang Guanxi, who just finished class, shorted 1.5 million shares of Tianye Liushui Company at the position of 4 yuan per share, and sold a total of 6 million worth of stocks.

  Then waited to collect the money.

  　New book asks for monthly ticket, recommended ticket

  (End of this chapter)