Chapter 365: Awe of the Magical World

Fang Huan Investment's elite trading department is destined for a sleepless night.
On ordinary days, these traders live a carefree nine-to-five life.
But when the market turns turbulent, everything changes.
Every single one of them is nailed to the office, working until the dead of night, accompanied only by the stars.
"Holy crap... is this for real?"
"Is it going to skyrocket?!"
Yet, not a single person shows exhaustion. Their expressions are less like they're watching the market and more like they're on a pilgrimage.
Everyone's eyes are glued to the monitors, unblinking, filled with awe for this magical world.
"Yesterday it surged by nearly 90%, and today...today it's already broken through 90%, reaching 111%?!"
"Of course! Look at this order book, it's all buy orders, not a single seller in sight!
Let me tell you, at this rate, a 111% increase is already being kind to the market!"
Just a short while ago, this stock called "GameStation" was a pitiful, unwanted stock worth only twenty dollars.
But who could have imagined that, fueled by the overwhelming enthusiasm of the forum users, and even with Elon Musk, the self-proclaimed "Iron Man of Silicon Valley," personally tweeting, it instantly ignited a wildfire.
The entire market exploded!
Not only were American retail investors going crazy, but speculators worldwide, like sharks smelling blood, swarmed in, howling and screaming.
The level of attention it garnered was phenomenal!
The prevailing environment meant everyone was stuck at home, bored out of their minds, and looking for an outlet for their energy.
Now, a super-funny opportunity had arrived, delivered to speculators worldwide!
"Holy crap...it's already broken $300..."
"Oh my god, what a pity! We only invested three million dollars initially! That's more than ten times!"
Su Hao didn't speak, just watched quietly.
He invested one million a day for three days straight, then acted like nothing had happened, leisurely becoming a spectator.
But that small "snack money" had, in the blink of an eye, ballooned to over thirty million dollars.
A full tenfold return!
If he had invested more initially, he would definitely have earned even more by now.
However, his almost supernatural intuition had drawn a red line for him from the very beginning:
That's all, not a penny more.
"Chairman Su, this...this momentum is simply defying the heavens! Should we add more to our position?"
A subordinate couldn't help but ask.
Yes, yesterday it surged 90%, and today it has already soared to 111%, charging headlong towards the 120% mark.
Throughout the process, Su Hao had repeatedly considered whether to add more.
But his intuition remained as calm as a still well, giving no signal whatsoever.
"No need," Su Hao said calmly, "There's no need to add any more."
His intuition only led him to invest a mere three million US dollars, a pittance compared to the scale of Fang Huan Investment.
This money was clearly not intended for profit.
So…what's the reason for this?
“Chairman Su, you mean…you think this thing is nearing its peak?”
“But…it doesn't look like it's about to fall at all!
Look at this buying pressure, it's as thick as a city wall, practically an impenetrable fortress!
The 120% mark will be breached in the blink of an eye, and 130% will probably be achieved in the blink of an eye.
It might even reach 200% today!”
Indeed, even Su Hao himself considered the upward momentum to be nothing short of frenzied.
While there was certainly the fervor of countless onlookers stirred up by Musk, the more fundamental driving force was a breathtaking, epic short squeeze.
“Those short-selling institutions missed their best chance to escape,” a trader analyzed.
“They probably thought this was just a flash in the pan, a short-lived rebound that would collapse after a couple of bounces.
They never imagined that Musk, that big mouth, would suddenly join the fray at that critical juncture.”
That tech visionary had always harbored a deep hatred for short-selling forces.
After all, his own company's stock price had been constantly harassed by these short-selling vultures for years, and he was thoroughly fed up.
Therefore, Su Hao concluded that Musk's intervention this time was absolutely intentional, a blatant act of revenge!
No, one could even say that from the very beginning, it was a calculated move.
The initial trigger for the community forum targeting “GameStation” was precisely because it carried an abnormally high and absurdly large short position.
"It's said that the worst off right now is a firm called 'Melvin Capital,' and several other hedge funds are also stuck with their money, crying out in despair."
Short selling, in essence, is about using borrowed capital to generate profits.
Borrowing shares, selling them at a high price, then buying them back at a lower price after the price drops to return the shares, profiting from the difference.
This is exactly the plan these short-selling institutions were playing.
Who would have thought that this "chicken," which they should have been trampling underfoot, would suddenly take off like a rocket, soaring to the heavens!
These institutions were instantly stunned, without even time to react.
They probably still harbor illusions, believing this is just temporary madness, and that things will soon return to normal.
Unfortunately, this train to Game Station is a one-way ticket; there's no getting off, and no intention of turning back.
So the question is, what will be the fate of the short sellers?
The soaring stock price means that the margin they need to add will increase exponentially.
As the stock price soared, the margin call hole grew larger and larger, and they simply couldn't fill it.
The only way out was to bite the bullet and buy more shares to cover their positions, no matter the price.
Every time they bought, the stock price rose even more sharply.
This was a "short squeeze," a brutal massacre!
"What's even more deadly is that the short-selling ratio for this stock exceeded 140%! What does that mean?
It means that even if they borrowed and sold all the shares circulating in the market, it still wouldn't be enough!
Now that these forced liquidations have erupted, how could the price not explode?"
Generally speaking, a short-selling ratio exceeding 50% and resulting in a short squeeze is considered a "disaster" on Wall Street.
But 140%... this isn't just a disaster, this is divine retribution! It's the end of the world!
"So, the stock price will continue to rise?"
"That's right. Everyone can see it now. The current situation is forcing it to rise!
It won't stop until the short sellers are liquidated and blood is gushing out!"
Su Hao subconsciously reached out, his fingertips lightly touching the name "Game Station" on the screen.
"!?!"
Just as his fingertips were about to touch it, a jolt of electricity shot through his fingers, up his arm, and straight to his brain!
His entire brain went blank for a moment.
"Chairman Su...?" His subordinate noticed his unusual behavior.
"Do you think 'Game Station'... could suddenly plummet?" Su Hao asked abruptly, regaining his composure.
"Huh? Plunge?"
"Chairman Su, are you kidding? How could it suddenly plummet under these circumstances?"
Everyone exchanged bewildered glances, finding the idea utterly absurd.
Just then, Li Huilin cautiously raised her hand.
“Actually… there is one possibility.”
“Oh? Tell me.”
“It’s… the brokerage firm directly bans trading in this stock.”
“You mean the circuit breaker mechanism?”
“No, even the circuit breaker mechanism couldn’t stop this crazy surge.” Li Huilin shook her head.
“I mean, literally, a direct ban on trading in the stock ‘Game Station’.”
Liang Haiyuan expressed his incomprehension;
“…Is that even possible? You mean, not the regulatory agency intervenes, but the brokerage firm itself bans trading?
That’s utterly ridiculous!”
Indeed, it was absurd.
Regulatory agencies intervening to block trading for market stability, while rare, has precedents.
But a brokerage firm, to maliciously suppress the stock price, unilaterally bans trading in a specific stock?
This is unheard of in financial history; it’s digging its own grave!
“What I mean is, if the current price is to really drop, something this outrageous and unethical has to happen,”
Li Huilin explained. “And even if they really stop trading, the stock price will still rebound sharply when it reopens.”
“Then it’s still the same as it going to keep rising.”
“Yes. But… there’s already a rumor circulating in the community forums,” Li Huilin added.
“The most popular brokerage app among US retail investors right now, ‘Robin Hood,’ isn’t it all about zero commissions?
That’s the problem. Some people are saying that ‘Robin Hood’ might face annihilation because of this incident.”
“Robin Hood” attracted a massive user base and rose rapidly in a short time thanks to its zero-commission strategy.
It could do this using a model called “Purchase-From-Flight (PFOF).”
Simply put, it’s like taking money from a pig but having a dog pay the bill.
They don’t collect money from retail investors; instead, they package retail investors’ trading orders and sell them to upstream “market makers” to make money.
When the market is stable and predictable, this model is extremely efficient, almost perfect.
However, once extreme and abnormal volatility and massive trading volumes occur, such as during "Game Stations," the Achilles' heel of the PFOF model is exposed:
"Robin Hood," acting as the middleman, has to pay an astronomical deposit to the liquidation house!
"You mean...they might take the risk because they can't afford the deposit?"
"Because the deposit amount might have ballooned to a point they can't handle.
Of course...the possibility is indeed very low, just kidding."
"Exactly! If they really dared to do that, wouldn't they want to go bankrupt?
Can they handle the mess that's left behind? They wouldn't dare even if they had eight lives!"
Su Hao also felt that the probability of such a thing happening was extremely low.
However, that electric current that just passed through his fingertips...
It was a feeling of dread that only arises when facing a cataclysmic change.