Chapter 30: Shorting the Market!

"...The current market situation is that almost all hot money is frantically flowing into A-shares."
In the conference room, senior trader Liang Haiyuan spoke first, kicking off the new team's first formal meeting.
Around the long conference table sat the core members of the newly formed seventh team.
Besides Su Hao, the newly appointed team manager, there were:
Senior trader Liang Haiyuan, three full-time traders, and one trading assistant.
Exactly six people.
Liang Haiyuan had clearly prepared thoroughly. He pulled up several charts and projected them onto the screen in front of him, calmly analyzing:
"Manager, you should also be aware that the previous prolonged slump in A-shares has been addressed by the management's series of policy measures. The central bank announced a 0.5 percentage point cut in the reserve requirement ratio, releasing approximately 1 trillion yuan of long-term liquidity. At the same time, 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 of liquidity to support the stock market..."
The charts on the screen, with their steep, almost vertical upward curves, were visually striking.
Liang Haiyuan continued, “Currently, the market has the momentum for a correction after a sharp decline. Policy benefits combined with low valuations are driving a short-term valuation recovery. The daily turnover of A-shares has now exceeded one trillion yuan, and 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 significant positive news, a continued surge in the market is practically a certainty! If it drives economic recovery, basic raw material industries such as steel are also worth watching. Related sectors could be considered for short-term trading, quick in and quick out; there should be good opportunities.”
Other department members chimed in with their opinions, their discussion remarkably unified:
That is:
Take advantage of this wave of policy measures releasing unexpectedly positive news and enter the market to build positions as soon as possible!
The earlier you enter, the more you can reap!
A moment later, and you might miss out on everything!
Su Hao listened silently, his fingers tapping lightly on the table unconsciously.
'Thankfully… I had some time to study some related materials beforehand,' he thought to himself.
Indeed, not only this time, but previous research reports had repeatedly emphasized:
Currently, multiple factors, including policy, liquidity, valuation repair, and foreign capital inflows, are resonating.
A deluge of data points to the same direction.
Although some negative voices have sporadically emerged, warning of risks, the mainstream expert opinion is:
With the intensive rollout of policies, my country's stock market will experience a bull market feast!
"Look, now it's not just our company's internal research department; almost all the investment experts and analysts outside are bullish!"
Liang Haiyuan was somewhat excited. "Some are even shouting that the market will soon reach 4000 points, and reaching 6000 points in the future is entirely possible!"
Indeed, an almost fanatical optimism permeated the market.
Some even argue that the future driver of the global economy will no longer be the traditional US market, but rather the massive and infinitely potential Chinese market!
In this situation, the safest and smartest approach is to follow the crowd.
Go with the flow.
Isn't that the very purpose of a research department?
Identify the strongest current trend, then tell everyone to ride that wave and soar together.
'But…' Su Hao frowned slightly,
'Why… do I feel a little uneasy? It seems… there's no particular 'feeling'?'
Perhaps it's because this choice is too "correct," too "obvious"?
Like a freebie, the answer is written all over his face, making him lose the excitement of catching his prey?
He composed himself, preparing to make a decision.
As the team manager, he needed to give clear instructions.
“Okay, then we…”
He cleared his throat, about to issue his first strategic directive—
‘Hmm?’
His gaze inadvertently swept over a pile of documents scattered on the conference table. One document, which he had casually flipped through and ignored, suddenly drew his attention like a magnet.
The document's title, written in bold black font, read:
【Analysis of Current Negative Factors in the A-Share Market】
This document wasn't bearish on the A-share market; it was more like a risk warning, or perhaps a routine "reference" appended by the research department to appear "comprehensive and objective."
Therefore, Su Hao had only glanced at it briefly before tossing it aside.
"..."
Yet, at this moment, as if drawn by some invisible force, he inexplicably reached out and picked up the thin document again.
The slightly rough texture of the paper traveled through his fingertips.
His gaze fell on the names of several products listed in the document:
[Buy Put Option on CSI 300 Index Futures]
[Buy Put Option on SSE 50 Index Futures]
[Buy Put Option on CSI 500 Index Futures]
Without exception, they were 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, those who bought them would lose money; they were considered "junk" and "traps," hence the extremely low price.
Normally, seeing something like this "for reference only" would have been ignored without hesitation.
But...
"...!"
But why?!
Why, just as his fingertips touched the paper, his gaze fixed on the product names…
an indescribable, intensely powerful tremor, without warning, like an electric current accumulating for millennia, 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!
So intense that his knuckles gripping the paper turned white from the excessive force!
So intense that every hair on his body stood on end!
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 piercing Su Hao's reverie and pulling him back to reality in the conference room.
He slightly lifted his eyelids, his gaze refocusing.
During his time working his way up in the company, Su Hao had thoroughly understood the ins and outs of his special 'talent'.
His so-called 'intuition' wasn't some spontaneous sixth sense, nor was it baseless guesswork.
It was more like a highly customized information processing organ.
Sufficient relevant data needed to be fed into his brain as 'nourishment' before that mysterious black-box system would operate at high speed.
It would analyze, organize, and summarize, finally 'dinging' the condensed conclusions, presented in a crystal-clear 'feeling' form, to the forefront of his consciousness.
A warning system based on massive amounts of data, yet presented as instinctive intuition.
At that moment, his warning system was flashing red lights frantically, the alarm practically blaring in his mind, telling him in the most direct and undeniable way:
Short! Short hard!
"So...the manager means that the A-shares we've repeatedly analyzed and unanimously predicted would rise will suddenly turn downwards, a complete market reversal?"
Li Huilin cautiously sought confirmation, her tone filled with disbelief.
The other members also cast shocked glances, their expressions complex.
"Ah, such huge positive news right now, but to say it'll plummet so soon...isn't that a bit...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 a bit too early to predict a drop now? Wouldn’t we suffer huge losses if we missed it?”
Su Hao knew exactly what was going on.
Logically speaking, this group’s analysis was indeed flawless.
To be honest, even Su Hao, who might be considered somewhat rudimentary in financial knowledge and practical experience, looking at it purely without any 'cheat codes' (advantages/advantages),
had to admit that the current A-share market was practically a money tree oozing with the scent of wealth.
It seemed that as long as you closed your eyes, poured all your available funds into it, and followed the crowd, you could easily experience the ultimate pleasure of counting money while lying down.
Finally, Liang Haiyuan couldn't hold back any longer. With a complex expression, he tentatively asked the question that instantly froze the air in the conference room:
"Manager, you...you don't really think...the A-shares are going to crash, do you?"
*Whoosh!*
In an instant, everyone's eyes in the conference room, like a dozen high-powered searchlights, focused on Su Hao's face.
Their eyes were filled with astonishment and panic, like, "No way?!" and "I even bought some with my own savings!"
Faced with this group of subordinates who seemed on the verge of a collective heart attack, Comrade Su Hao displayed a composure completely out of character for his resume.
He didn't even look up, simply uttering a single word in a flat tone, as if stating an objective fact rather than expressing a subjective opinion:
"Yes."