Rebirth of the Capital Legend

"Why are you so happy today?"

Noticing Fang Wanqing's smiling face in front of the computer, her colleague next to her asked with a chuckle.

"Nothing." Fang Wanqing responded, "I just suddenly thought of something and found it a little funny."

"Then why are you watching the trend of the pound exchange rate?" The colleague asked in confusion, "Did you short sell the pound exchange rate contract this morning and last night? Wow... Tell me quickly, how much did you short sell and how much did you earn?"

Fang Wanqing rolled her eyes at her and said, "No, I was just... just taking a look. After all, the UK's referendum on Brexit today is a big deal for the world. The result of the referendum affects not only the financial market, but also the future direction of the global economy. This is also closely related to the business of our venture capital department."

"That's true." The colleague thought for a moment and responded, "Looking at the current market news, I think the referendum result points to Brexit. Speaking of which, our company's hedge fund trading department should have made a lot of money from shorting the pound exchange rate market this time."

"Yes." Fang Wanqing nodded. "Mr. Frederick's 'Evolution No. 1' fund product did sell short a lot of pound exchange rate contracts."

"I'm so envious." A colleague said, "If the hedge fund trading department can make a lot of money this time, I wonder how much the quarterly bonus will be. Sigh... In comparison, our department seems to be a clean department. It's almost the end of the month, and our performance is seriously not up to standard!"

"There's nothing to be envious of," Fang Wanqing said. "Our department can basically make a profit regardless of drought or flood, but the same cannot be said for the hedge fund trading department."

"That's appropriate." The colleague smiled and felt a little more balanced.

While the two were talking, seven more polling districts announced their final referendum results.

According to the final referendum results in the latest polling districts, the gap between the number of people supporting staying in the EU and the number of people supporting leaving the EU has not narrowed, but has continued to widen.

At this point, more than 40 polling districts have announced the final referendum results.

In the polling districts that announced the final referendum results, the number of people supporting Brexit was almost 18 more than the number of people supporting remaining in the EU.

This means that the final referendum result is increasingly leaning towards Brexit.

At the same time, the gap between the number of people supporting Brexit and the number of people supporting remaining in the EU has widened again.

The trend of the British pound exchange rate also fell rapidly again.

At 9:11 am, the pound exchange rate fell through the 1.4300 level, and the bullish sentiment in the market and the confidence of many major bullish institutions further collapsed.

At 9:21 am, the pound exchange rate broke through the 1.4200 level, completely breaking through the psychological defenses of the bulls in the market.

At 9:25 a.m., the pound sterling exchange rate fell to around 1.4100, approaching the lowest exchange rate during the global financial crisis in 2008.

“It collapsed, it collapsed… The bulls in the market have completely lost their resistance.”

Seeing that the pound exchange rate was approaching the bottom of the financial crisis in 08, some retail investors in the foreign exchange market discussion forum where many speculative retail investors gathered on the global online platform hurriedly exclaimed.

"The situation of longs killing longs has already formed. Under this pattern and trend...whether it is expectations or market trends, it will be difficult to reverse, right?"

"My God, starting from 1.5000 points, it has fallen by nearly 1000 points in just two or three hours."

"The shorts are really fierce. There should be quite a few longs that got liquidated this morning."

"Alas, I stopped the loss near 1.4600. This is... too scary."

"The number of people who support Brexit has exceeded the number of people who support staying in the EU by almost 20. With such a big advantage... it should be difficult for the referendum result to turn to staying in the EU, right?"

"It cannot be said that there is no chance of a reversal, but it can only be said that the chance is very small."

"The referendum results in core regions such as London, Manchester, Leeds, etc. have not yet been announced. As long as the voting results of one of these regions are overwhelmingly in favor of staying in the EU, the current result can be reversed. However, what is the probability?"

"Don't you mention that according to the preliminary vote count and the forecasts of various institutions, more than 60% of Londoners support staying in the EU? If this data is true and reliable, then the difference of 20 people can be made up with the total population of London and the more than 60% support rate for staying in the EU."

"Hehe... the agency's predictions? Looking at the voting results in the previous districts, how many of the agency's predictions were accurate?"

"To be precise, there were only one or two voting districts where the predictions were accurate."

"Therefore, the forecasts of institutions and the so-called market expectations are completely unreliable in the face of such referendum events. If you make transactions based on them, you are likely to suffer huge losses."

"But the pound exchange rate has plummeted by nearly 1000 points from its high this morning. If we continue to short it, the risk is not small, right?"

"I think we should still respect the market trend. It is right to go short, but we must set a good stop loss."

"After this 1000-point plunge, those who didn't set stop losses should have been liquidated."

"The main long institutions in the market should not have given up. Looking at the number of open long positions in the market, after the pound exchange rate fell below 1.4200, it stabilized and no longer dropped sharply. In addition, there is a slight increase trend at present."

“It seems that many people bought at the bottom before the referendum results were officially confirmed!”

"With a profit margin of 1000 points, many short-term shorts are currently concentrated on covering their positions."

“It looks like the decline has stabilized around 1.4100.”

“The main reason is that the voting results in the core regions have not been released, and uncertainty still exists.”

"Alas, I didn't buy short immediately at the previous high point, which was a big loss. Now I don't dare to buy short again, for fear that the result will be reversed, and then I will be finished."

With the heated discussions among many retail investors...

As for the trend of the pound sterling exchange rate, there is still uncertainty about the final referendum result.

The short-selling institutions that made huge profits in the market, as well as many speculative short-selling traders who had previously chased the shorts, began to take profits and cover their positions at this time.

Moreover, as short positions were covered in large quantities, the number of open short positions in the market dropped sharply.

At the same time, the pound exchange rate began to stabilize around 1.4100.

Many long funds that were looking to buy at the bottom also began to enter the market.

This caused the pound exchange rate to briefly fluctuate around 1.4100 points, and then began to rebound rapidly. In just two or three minutes, it regained the 1.4150 points.

"It looks like there is a lot of short-selling funds in the market that are taking profits and covering their positions!"

Noting the rapid rebound of the British pound exchange rate after stabilizing at 1.4100, and also noting the rapid decline in the number of open short positions in the market, Meng Shengfei from the Investment Department of Huayin International, Hong Kong City, said with emotion through the instant messaging tool.

"There are indeed a lot of short-selling funds covering their positions." Kong Fansheng observed the market trend and responded, "There is already a profit margin of almost 1000 points from the morning high. It is reasonable for many short-selling funds to take profits. In addition, the voting results of many core regions have not yet been determined. The final referendum result may still be a result of supporting staying in the EU. In this relatively uncertain situation, it is completely correct to take profits at the right time amidst the huge floating profits."

In just two or three hours, the pound sterling exchange rate continued to plummet.

The Investment Department headed by Kong Fansheng held nearly 20 short positions in the British pound exchange rate, and had already made a floating profit of more than US$14 billion.

Faced with such huge floating profits and subsequent uncertain markets.

Not to mention other major short-selling institutions, even he himself had a strong desire to take profits and close his positions.

"The number of people who support Brexit has exceeded the number of people who support staying in the EU by 20," Su Yi said. "It is already quite difficult to reverse this situation."

"The final result of the London referendum has not yet been announced. Theoretically, there is still a possibility of a reversal," Frederick said. "But this requires no more surprises in other major core voting districts. And judging from the voting results of various districts this morning, there seem to be quite a lot of such surprises."

"Mr. Su, don't you plan to reduce your positions and lock in profits at this point?" Meng Shengfei asked.

Because he had decisively added nearly 1.4600 short orders near the 2 point, the floating profit of the Investment Department 16, which he is now in charge of, has exceeded US$ billion.

Such a huge floating profit is already the largest investment floating profit in his career.

Therefore, he could not suppress the urge to reduce his positions and take profits.

"No plans." Su Yi responded with a smile. "The main long institutions in the market have not completely collapsed yet. At the same time, the market's expectations for the referendum results have not yet been fully realized. Although the pound exchange rate has fallen by nearly 1000 points from its early high, it is still down... When the Brexit referendum result is officially expected, with all the longs in the market concentrating on cutting their positions or being forced to liquidate their positions, there will definitely be huge room for a sharp drop. We have huge floating profits and have taken the absolute initiative in the market. There is no reason to close our positions and leave the market before the expectations are realized."

"Mr. Su's operational logic and pattern are truly impressive." Frederick couldn't help but praise when he heard Su Yi's words.

He knew that according to the holdings of the main fund "Hua Yi Cheng Yuan No. 1" managed by Su Yi, the floating profit of the fund's holdings at this time might have exceeded 23 billion US dollars.

With such a huge floating profit, we are not blinded by the profit.

And also maintain absolutely calm analysis and clear logic.

He could only admire this in his heart.

Su Yi smiled and responded: "In this regard, I still have a gap with Mr. Frederick."

"Haha..." Frederick laughed and said, "Mr. Su is being modest. In this round of short-selling of the pound exchange rate, Mr. Su is famous enough in the global financial community."

As the few people talked briefly.

The pound sterling exchange rate has rebounded and repaired the 1.4200 level.

Faced with the fund account's profit of hundreds of millions of dollars being withdrawn in an instant, Frederick remained calm and indifferent.

Although Meng Shengfei agreed with Su Yi's analytical logic and his views, he saw the rapid rebound of the pound sterling exchange rate and the rapid withdrawal of profits in the fund account.

I hesitated for more than ten seconds.

Finally, he couldn't help but issue trading instructions to each trading group in the trading room to take profits and close positions.

The trading groups covered and closed more than half of their short positions at market prices, leaving only about 7 short positions.

At the same time, Kong Fansheng's emotions are much more stable than Meng Shengfei's.

But he thought about it and decided to close about one-third of his short positions to be on the safe side.

This was accompanied by the profit-taking and liquidation of short positions by the main short-selling institutions in the market, like the two major investment departments of "Huayin International", and the continued intervention of bottom-fishing funds.

Even though time passes.

The final voting results of several major voting districts announced later were still slightly biased towards supporting Brexit.

However, the pound exchange rate continued its rebound trend and further quickly repaired the 1.4250 point.

"The trend of the pound exchange rate and the market referendum data release results are actually showing an opposite trend. Could it be that the final voting results of several core voting areas were leaked in advance? Could it be that the referendum results are reversing in the direction of supporting staying in the EU?"

Noticing that the pound exchange rate quickly recovered some of its previous losses and began to move in the opposite direction of the market referendum data results, the core trader Yamamoto Hisaichi said with a little confusion in the main fund trading room of Mitsui Yoshitomo Port City Investment Co., Ltd., which had been forced to reduce most of its long positions.

When Sato heard what Yamamoto Hisaichi said, he looked at the market trend carefully and had the same question in his mind.

However, despite these doubts.

At this moment, he didn't dare to add any new long positions.

The same situation also occurred in the main fund trading room of "Huifeng Huanyu No. 1".

Fund manager Godfrey stared at the rapid rebound of the pound exchange rate, pondered for a while, and came up with this guess. He turned his gaze to Jeremy, the head of the Intelligence Department, and asked, "Is there still no movement from the Bank of England? There is still no latest news about the final voting results in core areas such as London, Leeds, Manchester, etc.?"

Jeremy shook his head, put down the international phone call in his hand, and replied: "The Bank of England still hasn't made any more market operations, and as for the referendum news, the information we can get is basically synchronized with the news released on the Internet."

"Ah..." Hearing what Jeremy said, Godfrey sighed helplessly.

"Mr. Godfrey, the rapid rebound in the pound exchange rate at this time does not seem to be due to a change in the news, but rather a large number of short-sellers in the market taking profits and covering their positions." Ernest, the head of the market research department, pondered for a while and said, "I think we should take advantage of this time to continue to reduce our positions and cover our long positions."

"Continue to cover?" Godfrey frowned.

Ernest nodded and said, "The number of people who support Brexit has exceeded the number of people who support staying in the EU by 20. This situation is difficult to reverse. In this extreme situation, we cannot gamble on low-probability results. While the market is currently covering a large number of shorts and bargain-hunting funds are intervening, what we need to do is to continue to close positions and stop losses, rather than hoping that the market can reverse, because the probability of this is too small."

The current size of long positions held by their institutions is still over 20 lots.

This size of long position has resulted in their fund's total losses exceeding $20 billion.

If you do not continue to close the position stop loss.

If the market trend continues to deteriorate, the extreme risks they face in their holdings will probably expand rapidly, causing even more serious losses to the fund.