If you cheat, money will follow

Early morning, Leda Building.

"Clear the warehouse and settle the accounts. Let's go back and rest early." Chang Le yawned and gave the last order.

"Okay." Billionaire Gu Jiahui calmly organized a group of multi-millionaire traders to do the final finishing work.

Gu Jiahui has passed his destiny, and many traders have also passed their thirties.

However, they still stick to their ordinary positions and work silently, never wavering.

What makes them stick to their posts, perform their duties conscientiously, and contribute silently?

It's money!

a lot of money!

The top domestic fund managers have a salary of about 1500 million.

This is approximately equivalent to 1/6 of Gu Jiahui’s annual income.

Gu Jiahui said to Chang Le:

"Boss, should we build a quantitative trading model?"

"Quantitative trading? I don't believe in this thing." Chang Le shook his head:

"I don't think this model is necessary."

"Although, it's fast enough, it's not smart enough."

"It just does what it does mechanically, according to a preset program."

"But the market is always changing rapidly, and the preset conditions are not always established in the market."

"Once it is not established, what will be the consequences? Just look at these circuit breakers."

"I understand, boss. What you mean is that it will not make the market better, it will only make certain situations in the market more extreme." Gu Jiahui nodded.

"Yes, how much profit have you made these days?" Chang Le asked.

"I haven't calculated carefully yet, but the combined income from various futures portfolios should be more than 200 billion." Gu Jiahui said.

"You see, without their quantitative trading, we wouldn't be able to make so much money." Chang Le said.

"Haha, indeed, for more than a week, the market has been very blind and the fluctuations have been too great." Gu Jiahui said with a smile.

Of course Chang Le would not tell the real reason.

Quantitative trading, combined with unparalleled luck, will cause a devastating blow to the trading ecosystem.

When it comes to eating, we can't destroy the kitchen.

Tuesday, May 4th.

Market participants are waiting for the fourth circuit breaker in two weeks.

The circuit breaker did not come, and the three major stock indexes collectively opened lower;

The Dow fell 0.1%;

The S&P 500 fell 0.2%;

The Nasdaq fell 0.6%.

Wednesday, September 4th.

Market participants continue to await the fourth circuit breaker in two weeks.

The fourth circuit breaker has not yet come, and the three major stock indexes collectively opened higher.

The Dow rose 0.24%;

The Nasdaq rose 0.33%;

The S&P 500 index rose 0.30%.

On Thursday, April 4, it was with trepidation that market participants...

The three major stock indexes surged.

The Dow Jones Industrial Average reported a gain of 1.18%;

The S&P 500 index rose 2.11%;

The Nasdaq rose 2.96%.

Friday, April 4th…

For four consecutive trading days, the North American market has converged, with volatility narrowing, and everything is calm.

The panic that spread last week disappeared without a trace, just like love, it goes as quickly as it came.

This makes investors a little uncomfortable.

The Sleep King, the Fed, and regulators breathed a sigh of relief.

Some Wall Street institutions are disappointed.

A week later.

The new North American SEC Chairman Gensler came to the White House and reported the situation to the Sleeping King.

"Mr. President, according to our investigation, Leda Investment has not participated in transactions in the North American market in recent times."

"What are they doing recently?" Sleeping King was curious.

"They are shorting the pound, the euro, and the yen in the foreign exchange market," Gensler replied.

"Shit! Why are their sense of smell always so sensitive?" Sleeping King shook his head.

Over the past year, the pound has continued to fall, setting new lows since 1985.

This is all caused by Brexit, which has also affected the trend of the euro.

Therefore, there is strong speculation in the foreign exchange market over Europe.

As for the Japanese yen, their inaction in the new energy industry has put their automobile industry in danger.

"They have been conducting short selling transactions in the foreign exchange market since last year." Gensler further said:

"They seem reluctant to enter our market now, with the last transaction being six months ago."

"Damn Leda Investment..." Sleeping King thumped his desk, and then continued to ask:

"But there will always be malicious short-sellers. Three circuit breakers in two weeks cannot be a normal phenomenon."

"Mr. President, the market doesn't necessarily correspond to economic fundamentals, and our fundamentals are very strong, but..." Gensler said:

"As Wall Street sees it, the lack of confidence caused by the epidemic and excessive quantitative trading are all factors that contributed to these three circuit breakers."

"Of course, malicious short selling is also the reason. During the investigation, we found the presence of some institutions."

"Who?" Sleeping King asked.

"Mike Barry, he is a staunch bearer of the S&P Index and believes that the S&P Index is out of touch with reality and there is a bubble."

"So, he sold off a number of heavy holdings and significantly increased his holdings of put options on the S&P."

"And Icahn, he has a nickname on Wall Street, the Wolf of Wall Street. He has a very heavy bearish position on the Dow."

"In addition, there is Wilson, who has always been a staunch short seller. He has accumulated at least US$10 billion in S&P put option positions."

"He believes that once the S&P exceeds 3000 points, it will be a bubble."

"In addition, there are dozens of institutions that have accumulated a large amount of chips in the semiconductor technology sector. The rise of carbon-based chips has given them a very strong desire to short-sell."

Sleeping King: "..."

He felt powerless.

The people and institutions listed by Gensler have a very large influence on Wall Street, and there are still people behind them.

"Can't we adjust the short-selling rules?" Sleeping King asked:

“Can’t it be made more difficult for these short sellers? We shouldn’t even allow short selling to exist.”

"Mr. President, we cannot go to extremes. Shorting is reasonable and beneficial." Gensler explained:

"It is a market self-purification mechanism that can constrain corporate behavior and reduce losses through risk hedging in abnormal or extreme market situations."

Sleeping King was furious: "However, now the stock market has been disrupted by these ugly short sellers. They wantonly spread rumors and guide public opinion, causing the market to continue to go to extremes in order to make profits."

Three meltdowns will definitely become a stain on him and then become the target of attack by his political opponents.

In the past few days, Mr. Wang has frequently appeared in front of media cameras and talked about the operation of the stock market.

"The old man is already 79. All the economic knowledge he has learned is from the last century. He knows almost nothing about the laws of modern economic operation."

"Our people should know this. It is very dangerous to choose an 80-year-old man."

"Since the founding of the North American stock market in 1929, there has never been a year where the stock market has been as bad as this year, and now our stock market is the worst stock market in the world, bar none."

The King of Sleep sees it in his eyes, hears it in his ears, and feels angry in his heart.

"I was actually laughed at by a Twitter president who only knows how to tweet..."

"Mr. President, if necessary, we can appropriately adjust the short-selling rules to prevent institutions from adjusting their short positions too recklessly," Gensler said.

"Oh? For example?" Sleeping King asked.

"For example, if information disclosure is completed and made public within 15 minutes after the transaction is completed, maybe this will keep institutions clear-headed?" Gensler expressed his thoughts.

"Good idea. I'd like to see such a rule go into effect."

"I'm going to push hard, but the resistance will be huge."