Chapter 218 Undercurrents (4

Securities margin trading, also known as securities credit trading, includes margin trading by securities firms to investors and margin trading by financial institutions to securities firms.

What is commonly referred to in the market as margin financing and margin trading refers to securities firms providing investors with financing and margin trading.

Franchise is when a customer borrows stocks from a brokerage firm to sell them, and then returns them as stocks, that is, short selling.

Financing usually refers to the direct or indirect financing activities between the holders of monetary funds and the demanders.

In short, after the customer pays a certain proportion of margin, the broker lends money to the customer to buy stocks, that is, buys short.

What Morgan refers to financing and purchasing stocks means that brokers directly provide funds to investors to purchase stocks.

The financing ratio is not the larger the better. Because the higher the leverage ratio of financing transactions, the greater the risk of customers after purchasing stocks.

For example, a customer owns $10,000, and after negotiating with the brokerage firm, he raises $9 million in financing and buys a total of $10,000 in stocks.

In this case, once the stock price drops by 10%, all ten thousand dollars of the customer will evaporate. If the funds are not invested immediately to replenish the position, the customer's stock will be directly sold by the vampire brokerage firm and forced to close the position.

In this way, the customer's losses are %. However, the evil brokerage firms are not hurt at all.

People’s greed is infinite. After experiencing the taste of financing, even if they make huge amounts of money, they will still stay in the stock market and engage in such a risky stock speculation.

At that time, as long as you make a mistake, you will lose everything, and it will only take a moment to destroy your family and die.

Let’s stop talking. When Morgan heard Bob say that the Chinese are rich and have not raised funds, and all buy stocks with their own funds, he felt a headache.

If Chinese people purchase rubber stocks with securities companies with a large proportion of financing, then they can only pay a very small price to say hello to the major alliances and suppress rubber stocks, which will make Chinese people lose their positions and leave the market with a vengeance.

If the Chinese raise funds in a small way, they can join forces with major alliances to suppress the stock price, build momentum in all aspects, put pressure on them, and allow them to hand over their chips obediently when making profits.

The most troublesome thing is that Chinese people use their own funds to invest in their investments.

Moreover, these hateful Chinese people seem to know clearly that rubber stocks will definitely rise. After making more than double the profit, they not only do not make profits and reduce positions, but are still mobilizing funds to continue buying.

Under such circumstances, if the price of rubber stocks is paid a huge price, the cunning Chinese are likely to not be moved, and they may even buy at a low price.

"Where do they get so much money from these damn yellow monkeys?" Seeing Morgan sitting on the chair with a gloomy face, Bob understood his intentions and complained.

After thinking for a while, Morgan said in a deep voice: "The rise of rubber stocks is already the general trend. If we want to attack these greedy Chinese, we have to go against the trend. If we go against the market, even if our strength is far better than them, the best result will be both sides and the loss is not worth the loss."

"Father, are you going to let these yellow-skinned monkeys get huge profits under our noses?" Little Morgan said unwillingly when he remembered that there would be countless money that would be earned by the weak Chinese.

Morgan sighed: "Little John, many capable people have extraordinary ability to make money. Chinese people with abilities can naturally be on par with us. In the future, you must remember not to look down on the capable yellow people."

Morgan nodded and said, "That Japanese country is very capable. They not only defeated the Qing country, but also defeated the Russian Empire. They can be said to be the only yellow race who is qualified to be on par with us."

At this time, Bob on the side suddenly interrupted, "Chairman, I have thought of a quick and effective way to deal with the Chinese. As long as I act according to my plan, I promise that the greedy Chinese will be in chaos and spit out all the profits they have obtained."

Morgan and his son were overjoyed and quickly asked Bob for advice.

After Bob smiled and told his plan, Morgan clapped his hands and said yes, and admired Bob's plan.

Morgan also expressed his appreciation with a smile and said affectionately: "Dear Bob, your strategy can be quickly decided, very perfect, I accepted it. I will add that we will immediately send someone to contact the Jewish consortium to reach an offensive and defensive alliance with them to jointly deal with the greedy and cunning Chinese."

Morgan also made a suggestion: "In addition, I will send someone to contact the Chinese to ask them if they need financing to buy stocks, and test whether they are a whole of interests."

The Morgan Consortium's action was indeed rapid. As soon as the market opened the next morning, rubber stocks were suddenly sold and shorted, and quickly looked for support points. However, stocks such as automobile stocks, motorcycle stocks and bicycle stocks that were closely related to rubber were snapped up and rose sharply.

As soon as the market opened on the morning of the third day, incremental funds entered the market to buy rubber stocks, barely maintaining the stock price of rubber stocks.

At noon, many newspapers such as the Wall Street Times, the Wall Street Journal and the New York Times jointly reported a news.

Major newspapers jointly reported that a little-known botanist Tony claimed that after years of careful research on rubber trees, he found that the growth cycle of rubber trees can be shortened by specific planting methods by more than 4 years.

So, while Tony became a hit, the stock price of rubber stocks, which was already struggling to support, plummeted.

Many investors who received this news did not hesitate to sell their rubber stocks. Short-term speculators who did not have rubber stocks were borrowing stocks from securities companies to sell short.

The selling pressure was heavy. The closing of the day, the stock price of rubber stock plummeted by 19%.

After the closing, the culprits who planned the plunge in rubber stocks gathered together and talked enthusiastically about the exciting aspects of the plan.

Morgan praised Bob's outstanding performance this time and said with a smile: "Dear Bob, this time we just shorted rubber stocks and made millions of dollars in book profits. Moreover, the car stocks, motorcycle stocks and other stocks bought at low prices have all risen sharply, hitting record highs. One of your strategies is really worthy of countless gold."

Bob had received a reward of a hundred thousand dollars in check, and a flower was laughing on his face, but he still said polite words in a humble manner.

Everyone celebrated happily, and Morgan said, "Mr. Bob, how do you think Chinese people will feel when they get such news?"

Bob replied affirmatively: "No matter who you receive such negative news, you will be in a mess. Apart from resolutely selling stocks to escape, I can't think of what they will feel."

Morgan said with a laugh: "The most important thing is that they are still profitable at the moment. As long as we are within the range they can bear, when the stock price falls to a certain price, they will definitely hand over the chips they have finally obtained without thinking, and hand over the chips they have finally obtained at a low level."
Chapter completed!