Entering October of 1987, the Dow Jones Index, after two months of adjustment, had dropped to around 2400 points. The market generally viewed this decline as a reaction to the overheating of the capital market. Many research institutions even signaled that the adjustment was complete, encouraging more funds to enter the market.
In Chicago, major funds also entered the November and December futures markets, with unprecedented scale. According to incomplete statistics, the funds on both the long and short sides each reached about five to six hundred million dollars, with the total market participation amounting to several billion dollars.
This included American and Japanese financial groups, European funds, speculators like Zhong Shi, and countless small retail investors hoping to make a profit.
"Mr. Zhong, are we really going to invest so much money? Shouldn't we hedge some of the risk by taking opposite positions? After all, our positions are quite large!" Andrew looked worriedly at the numbers on the screen, his brows furrowed.
Zhong Shi had allocated most of his assets to the November and December futures markets, establishing a position worth one hundred million dollars, with an additional twenty million dollars in his account as margin. What worried Andrew was that all of these were short positions.
Typically, such short selling without other purposes clearly indicated a lack of confidence in the stock market. Although the U.S. stock market had shown some recent volatility, the overall trend remained positive. Full short positions made little sense.
Generally, even funds specifically operating in the futures market must constantly monitor the direction of the Dow Jones Index, as trend-based operations are unavoidable.
For those hedging, they only needed to take opposite positions in another market.
Unlike stocks, futures require rapid trading when funds are insufficient, profiting from market fluctuations. Each fluctuation represents a battle between bulls and bears.
The Chicago Mercantile Exchange has clear position limits for each trading seat and account, to prevent large funds from manipulating the market through massive sell-offs. This was a significant headache for Zhong Shi, who had to open several different accounts with multiple brokers to勉强 establish the large position.
For the trading strategies of the other brokers, Zhong Shi had only one instruction: maintain the short positions unchanged. If the maintenance margin in the account was depleted, they should call him immediately. Any action would await his call, and during this period, communication must remain open.
To ensure this, Zhong Shi even called the brokers in the middle of the night to confirm they were diligently monitoring the market, which reassured him.
During this time, only Lu Hu accompanied him, while Zhong Yi was busy with schoolwork. However, when he had some free time, he would drive his flashy Porsche over with enthusiasm.
Under Zhong Shi's guidance, Liao Chengde invested a small portion of his assets in the Hang Seng Index futures, selling a significant amount of "Cheung Kong Holdings" shares. By this time, Li Ka-shing had become the richest man in Hong Kong, with "Cheung Kong Holdings" playing a crucial role in his rise.
In the late 1980s, Hong Kong's real estate market revived, and the construction of large buildings and infrastructure projects made real estate companies extremely profitable, with Cheung Kong Holdings, Sun Hung Kai, and others benefiting the most.
Initially, Liao Chengde was ambitious, hoping to make a significant impact in the Hang Seng Index market. However, daily losses darkened his mood. If not for Zhong Shi's performance, he might have given up.
When Zhong Shi was monitoring the market, Liao Chengde and Liao Xiaohua visited several times. Seeing Zhong Shi's calm demeanor, the Liao family gained confidence.
The Hang Seng Index futures and the S&P 500 traded at different times, one during the day and the other at night. The Liao family visited a few times, but seeing Zhong Shi's unperturbed and confident demeanor, they found it uninteresting and stopped coming frequently, meeting only once a week.
The gains during this period also made Liao Chengde extremely envious. In the first two weeks of October, the Dow Jones Industrial Average continued to fall, losing nearly 400 points, and the S&P 500 lost over 40 points. This increased Zhong Shi's account by several tens of millions of dollars.
Since August, the Dow Jones Index had been falling, but not as sharply as in the first two days of October. The market participants were puzzled and uncertain about the cause.
"Mr. Zhong, should we increase our position?" One of the brokers called, the young man on the other end sounding excited and somewhat presumptuous.
"What? Increase the position? I warn you, do not make any unauthorized moves on my account, or I will sue you to bankruptcy, even if it means losing all my profits!" Zhong Shi was startled, his mind clearing. He detested brokers who thought they knew better and meddled in client affairs, especially those who dared to touch client funds, which was clearly illegal.
Due to his distrust, Zhong Shi had only opened a small position of five million dollars with that broker, which had now grown to nearly ten million dollars.
Hearing Zhong Shi's warning, the overzealous broker's enthusiasm cooled. He didn't understand why the client was so angry. To him, a nearly doubled profit was a perfect time to capitalize on the momentum.
Although puzzled, he understood the broker's code of conduct and could only humbly apologize before hanging up, feeling dejected.
"I hate people who act on their own!" Zhong Shi muttered after hanging up.
Affected by the New York Dow Jones Index, major financial markets worldwide also fell, though the extent varied. The Hang Seng Index also declined, and Liao Chengde's account saw some gains.
"Old Liao, you look so happy lately. Did you find a new wife?" Zhong Shi teased, seeing Liao Chengde's smiling face.
Liao Xiaohua, sitting quietly to the side, his pupils constricted, his face full of questions, glanced at Liao Chengde. Recently, Liao Chengde had spent more time at home and less with Zhong Shi, unlike the previous period when he was always by Zhong Shi's side, almost as closely as Lu Hu. If Liao Chengde had an affair, Zhong Shi would likely know.
"Mr. Zhong, why do you mock me so! I'm an old man!" Liao Chengde said with a bitter smile.
"It won't be long before you reach a new level of wealth. Really, don't you want a second wife?" Zhong Shi asked teasingly, but his eyes were on the nervous Liao Xiaohua.
Since their dinner, Liao Xiaohua had changed, no longer the arrogant and reckless young man he once was, but a humble and polite person.
Zhong Shi understood this transformation. When one reaches a new level, one naturally feels one's own insignificance and a sense of awe.
Liao Xiaohua was a typical example.
"Mr. Zhong, stop teasing this old man. I wonder what kind of woman you will marry in the future!" Liao Chengde, being shrewd, shifted the conversation to Zhong Shi.
"Really? What kind of woman will I marry in the future? And what kind of woman would be suitable for me?" Zhong Shi was momentarily stunned.
He always thought it was too early to consider such matters. In his previous life, even in his forties, he had never thought about personal issues. Now, reborn, was this a second chance given by heaven, including a chance to handle his emotions? (I hope for your support, thank you!)