In fact, at this time, the bulls are suffering, especially those small institutions that hold overnight positions in the short term, and they are almost about to vomit blood at the opening of the market.

Perhaps the rise in the first two days gave them a taste of sweetness, so the small institutions that were originally doing daily short-term operations were relieved and boldly reserved their positions until the next day. As a result, within two days, the Hang Seng Index had another "stock crash", and it plummeted by thousands of points as soon as it opened, which meant that each of the long orders in their hands instantly lost 50,000 Hong Kong dollars, and the brokerage called immediately.

The long positions they hold in HSI futures may be for arbitrage or hedging, but whatever the purpose, the current situation dooms most of them to a tragic fate.

If the investment focus is on the spot market of Hong Kong stocks, and after seeing the continuous decline of Hong Kong stocks, they decisively establish a portfolio that focuses on short selling Hong Kong stocks and is supplemented by long Hong Kong stock futures indexes, then they may be stealing money now, because the situation at this time is in their favor, even if the Hang Seng Index futures are losing, but on the whole, they are still making money.

It's just that there are absolutely very few institutions that can make such a portfolio, because the Hong Kong stock index is basically composed of more than ninety percent of listed companies. In this case, unless you build a portfolio that is exactly the same as the Hong Kong stock index, it is inevitable that the decline will not match the Hang Seng Index. In this case, even if you make money by shorting the spot of Hong Kong stocks, the magnitude may not be as large as the loss of hedging HSI futures.

For example, an institution may construct a short-selling portfolio worth HK$1 billion with companies that incorporate certain public services. Moreover, these institutions have heavy positions and sufficient cash flow, so these stocks are more resilient. In the current situation where the whole market is down by more than 30%, because of the existence of these heavy stocks, the portfolio has fallen by only 20%. Assuming that HSI Futures has a long position of 500 million Hong Kong dollars, then the income is about 200 million Hong Kong dollars, the loss is 150 million Hong Kong dollars, and the final profit is a net income of 50 million Hong Kong dollars.

This is naturally a relatively good situation, but how can it be so accurate in fact? Once the spot position of the Hang Seng Index is not satisfactory, the loss is more than 200 million Hong Kong dollars. Or maybe it's a lower decline in the portfolio. If it does not reach the level of HK$150 million, then the entire portfolio will lose money.

It is very difficult to grasp this degree, and it is good to have one out of ten fund managers in the market who can do this. This involves the judgment of market trends. Portfolio building. The allocation of hedging mechanisms and the adjustment of positions at any time. What's more, some funds are equity-biased, which means they are not hedge funds. Then, in the case of a sharp decline in the market, they can only watch the net worth shrink and have nothing to do.

As for arbitrage, it is even more miserable, especially in the Hang Seng Index futures market. Not to mention the premium between the long and short months, just talking about the wrong direction can already make many institutions specializing in arbitrage declare bankruptcy, especially in the Hang Seng Index futures market with more than ten times leverage.

For example, a futures fund specializing in arbitrage is long in the spot month and short in the next month, and the two positions are different, in which the spot month is 10 million Hong Kong dollars to long a contract with a total value of 10 million Hong Kong dollars (assuming the leverage is 10 times, the actual leverage is 1), and the contract is short selling 20 contracts. Due to the previous optimism of the market, the fund shorted the contract worth 7 million Hong Kong dollars with a quota of 7 million Hong Kong dollars in November, and the premium between the two was 50 points (long in the far month), and the contract was 17 contracts (because the premium could not actually be 17 contracts), and the leverage and actual leverage were the same as the previous month.

Today's index plummeted by 1,000 points, with a loss of 50,000 Hong Kong dollars per contract, according to the above figures, the total loss of the long spot month is 1 million Hong Kong dollars, and the loss is 10%, and the long contract of the far month is only a profit of 850,000 Hong Kong dollars even if it falls synchronously with today, and the total loss is 150,000 Hong Kong dollars.

This is a better situation, and it is with very little leverage. If the actual leverage is 10, then the spot month contract has been liquidated, although the possible loss is still 150,000 Hong Kong dollars, but the effect is completely different.

In fact, these are portfolios under the hedging mode, for most investors, the hedging model is a relatively advanced investment model, and most of them will choose a single direction of trading, this trading mode is a complete gamble, especially the Hang Seng Index This sharp rise and fall may exceed 1000 points in the market.

……

The index stopped around 9,000 points, neither rising nor falling, and only floated in a few tiny ranges, which surprised many investors.

But this is not surprising for the main long funds, it is clear that this is a signal released by the short side, which means that the bulls will close their positions with them at this point.

In fact, after a large short closing order at 9,200 points, the index then plummeted. In this case, many bulls have been forced to close their positions, firstly, the magnitude of today's gap is too alarming, and their psychological defense line has been stretched, and secondly, as the index continues to fall, the loss of the book has also expanded, and the cash left for them to maintain is getting less and less, in this case they can only choose to close the position.

Although the main bulls are still struggling to support, they also have to face pressure from the cash side, after all, the current loss of a contract is more than 50,000 Hong Kong dollars, and it is only today, if the opening price is higher, this number may be even greater.

The unwilling bulls then launched an attack in the cash market in an attempt to pull the index higher, which would reduce their losses and ease the pressure from the bears. It's just that when they make a slight move, several heavyweights in the market, such as Changhe Industrial, Hutchison Whampoa, HSBC Holdings, Sun Hung Kai, etc., immediately pop up with an almost endless stream of selling orders, which makes them powerless to push the entire market index up.

And that's not all. The index, which was hovering around 9,000 points, fell further, directly to 8,800 points, then slowly rose to 9,000 points, and then stayed there.

At this moment, the bulls fully understood that this was a naked demonstration by the bears: if they did not accept this price, they would further force Hong Kong stocks to fall, making them lose more.

In desperation, the bulls' camp collapsed first, first with a small stock of long liquidation orders were thrown, and then quickly matched. After seeing this sign. The other bulls couldn't sit still. If it can't be leveled in the first place, God knows what will happen to the Dao. Driven by this psychology, the bulls successively threw out large-scale closing orders, and saw the bulls admit defeat. The bears don't dwell too much on it either. The two sides have tacit understanding to level the October Hang Seng Index futures on a large scale in the market.

The volume of the market has increased dramatically. But the index is not shocked, and it has become an aggressive thing. Naturally, small shareholders and analysts do not understand. But big institutions and major funds understand what is going on.

……

Bears for what can dominate the market, for what there is a steady stream of spot lots to throw, this is probably the biggest doubt in the minds of investors who understand the strange market today, which even includes Billy. Hedge fund elites like Kim.

"It's actually very simple, it's just a matter of time." Julian Robertson smiled at the Billy Robertson. Jin and other Tiger Fund executives said: "First of all, I have 5 billion Hong Kong stocks in hand, and later, I borrowed a total of 5 billion Hong Kong stocks from brokers, which constitutes a total of 10 billion Hong Kong stocks in the portfolio. At the same time as the short selling, I have successively filled a lot of positions, and as of yesterday, I have a total of 12 billion Hong Kong stocks in hand. Among them, 7 billion is the spot of Hong Kong stocks originally held, that is, our own investment. The other 5 billion is the position after shorting and buying, and this part of the spot is to be returned to the brokerage. ”

"You know, we borrowed for a month, and we still have a few trading days to go, so there's plenty of time left for us. I believe that several other companies are also planning to do the same as us, so the bulls want to exert force, think about it, we have a total of tens of billions of spot throws, do they have the ability to eat? ”

Speaking of this, Julian Robertson was already smug and couldn't help laughing.

"But?" Billy. Jin frowned, glanced at Julian Robertson carefully, and saw that the expression on his face remained unchanged, before he continued: "In this way, our position will be too heavy, and if we hold it for too long, the more unfavorable factors there will be. After all, Southeast Asia is not our ......"

"No!" Julian Robertson waved his hand and stopped Billy. Kim continued, "Southeast Asia is precisely the focus of our investment for some time to come. Do you think that's the end of the Hong Kong market? I'm telling you, the show is just beginning! ”

The senior management of Tiger Fund was unanimously shocked in their hearts, they never expected that there would be a plan for the Southeast Asian market. But thinking of the income this time, a fire rose in their hearts again, yes, this time the income is quite rich, enough for them to get a lot of bonuses.

……

On October 28, at the close, the Hang Seng Index plummeted all day, and near the end of the close, it rose slightly due to the large-scale liquidation of long and short positions in the futures index market, closing at 9059 points, down 1438 points all day, a decline of 13.70%. At this point, the first wave of attacks by international speculators on Hong Kong's capital market has finally come to an end, if the August attack is considered a tentative one.

From the highest point of 15,242 points in early October to 9,059 points today, Hong Kong stocks have fallen by more than 5,000 points, and the market value has evaporated by one-third, reaching a staggering 2.1 trillion Hong Kong dollars, which is converted into about 300 billion US dollars. And if these market capitalizations were calculated at a 5% liquid share (which is an extremely conservative proportion), the losses would be around $15 billion. Counting the Hong Kong stock futures market, interest rate market, etc., the loss of cash and silver is as high as at least 30 billion US dollars, naturally, these are extremely conservative and underestimated figures.

In addition, losses in other industries such as real estate and banking are not counted.

In terms of hedge funds, the loss of $6 billion in Hong Kong dollar spot due to the exchange rate is not more than 11.65 million US dollars, and the loss of interest is about 350 million US dollars, which does not add up to more than 400 million US dollars, and the number swept away from the Hong Kong capital market is as high as 100 times, which also makes the Hong Kong market have the "reputation" of "super ATM".

The Tiger Fund alone has swept away more than 3 billion Hong Kong dollars from Hong Kong's Hang Seng Index market, which is about 500 million dollars when converted into US dollars. And that's not counting the gains from the interest rate futures market and shorting Hong Kong stocks, which is closer to $1 billion if you were to give a rough figure.

……

"No, it's far from over!"

Zhong Shi looked at Ma Jiarui in front of him, and said categorically: "It seems that they have retreated, but the end of the song has not dispersed!" (To be continued......)

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