Chapter 102: Testing the Waters

The mysterious market maker chose seven stocks. According to Fang Xiaoqiang, with just over a billion in capital, it was impossible to cause fluctuations in the overall market. Thus, the market maker opted to focus on a few individual stocks.

Were all seven stocks particularly strong? Fang Xiaoqiang said, “Come on, if you really had the ability, you’d choose Cheung Shing—probably no one in Hong Kong could bring it down. Li Ka-shing could just throw some money at it to stabilize the price.”

It was an exaggeration, but the logic held true. Choosing too strong stocks meant limited gains and higher costs. Worst of all, there was a high risk of price support from the market makers. No company wanted to see its stock prices keep falling, so they often went to great lengths to support them.

Small companies clearly had a limited future, offering only meager profits. Therefore, the market maker could only choose mid-sized stocks. At this point, Fang Xiaoqiang, full of energy, said with eyes wide enough to scare even the madman Xiao Ran, “I’ve gathered information on most Hong Kong stocks, along with market capital flows. It’s easy to predict the market maker’s moves!”

The seven stocks included various types—manufacturing, real estate, foreign trade, and apparel industries. Fang Xiaoqiang’s choice was simple: he would go after two of them. He carefully explained to Xiao Ran, “No matter what the market maker plans, there are many experts in the stock market, and they must hide their true intentions. So even if they have the strength for all seven stocks, they can’t control them all!”

“And our goal isn’t the stocks but the futures. There’s no need to pursue them relentlessly. As long as we can get a good deal, it’s fine. We’re not investing much now, so I believe they won’t do anything to us!” That was Fang Xiaoqiang’s explanation, and Xiao Ran agreed. Professionals should handle professional matters—that was the right approach.

On October 1st, not long after the market opened, the seven stocks soared rapidly. With the overall market performing well recently, this stimulus pushed the Hang Seng Index up by over forty points.

By noon, before the market closed, Xiao Ran still hadn’t seen any sign of Fang Ruohai. When the market reopened in the afternoon, Fang Xiaoqiang slowly sold off his stocks via computer. He explained to Xiao Ran and Guan Xin, who were staring at him in shock, “Two of the seven stocks have already hit their daily price limits. That’s bad news. Based on my experience, the market maker will likely keep this positive trend going until the end of the day. But once the market opens tomorrow, there’s a high chance of a sharp drop—created to spread panic.”

“But if you say a drop will only happen tomorrow, why not take advantage now?” Guan Xin couldn’t help but interject. He didn’t understand this strategy. “I think even Xiao Ran wouldn’t mind having more money!”

“That’s something you don’t understand. The other side can easily drive down the stock prices in the afternoon. So I think it’s safer to act now!” At this point, Fang Xiaoqiang’s face turned slightly red as he added, “Anyway, Boss Xiao’s goal isn’t here!”

Fang Xiaoqiang looked at Xiao Ran in confusion, scratched his head, and asked, “But I really don’t understand. Given the current situation, going with the market makers is the best choice. Boss Xiao, why do you insist on trading futures? With the current situation, it’s hard for those seven stocks to have much impact on futures!”
Xiao Ran had a strange expression. He was wondering if history might change in this regard. But in his opinion, the possibility was low—the butterfly effect might not cause much of an impact. After all, he had only gotten involved in the film industry so far, and his overall influence was practically zero. Moreover, this was a financial matter, and since he arrived here, he hadn’t noticed many significant changes. Gritting his teeth, he decided to take a gamble.
The first day passed uneventfully. The two stocks he had bought earlier had earned Xiao Ran ten million. That night, he still acted as if nothing had happened and went to parties and such.
It was the second day that things really started. Everyone first met in the command center. Xiao Ran took a deep breath and asked, “Xiaoqiang, how much do you think we need as an emergency reserve? How much should we invest this time?”
“We don’t need much. I think, if nothing goes wrong, since the market makers were caught off guard, the index should drop by more than fifty points before the market closes in the morning. As for the afternoon, the others will surely be prepared, so the gains will likely be limited!” Fang Xiaoqiang thought for a moment before saying to Xiao Ran, “The six tens of millions we have is more than enough. Use the five tens of millions from the fund as an emergency reserve!”
The funds controlled by Rong Xiaoyi and Lin Yongqiang were Xiao Ran’s secret weapons against Fang Ruohai. He had given them fifty million so they could launch a surprise attack. After pondering for a while and guessing Fang Ruohai’s mindset, Xiao Ran suddenly had an idea: “How about this? Let’s invest all six tens of millions today. This way, after just a few attempts, Fang Ruohai will definitely think I only have six tens of millions. By then, he’ll regret not crushing me from the first try. When we go all out again, he’ll surely become impatient driven by that regret!”
The others considered the feasibility and immediately stared at Xiao Ran in shock. While Xiao Ran wasn’t sure what was going on, Fang Xiaoqiang gave him a thumbs up. “I don’t know if this plan will work, but you can read the other party’s mind—I admire you. If you were to trade stocks with your speed, precision, and determination, we’d all be in trouble!”
At the opening, the Hang Seng Index was at 3,976 points. At this level, Fang Xiaoqiang immediately placed an order to buy 3,000 lots, then waited quietly for the market makers to drive the stock price down.
At that moment, news quickly spread through the otherwise calm exchange: someone had bought 3,000 lots of Hang Seng Index put options. While everyone was mocking this fool, they felt a sense of unease deep down.
But in less than three minutes, they stopped laughing. The seven stocks that had been soaring the previous day plummeted like helicopters crashing. It seemed impossible to stop the decline. It wasn’t until the market closed at noon that they could breathe a sigh of relief, though they were even more anxious now.

Not long after the market opened in the morning, in Fang Ruohai’s command center, Tony, who had been monitoring stock price changes, exclaimed, “Hey, someone bought 3,000 lots of Hang Seng futures to go down? Could it be the market maker? Impossible!”
Without Tony needing to explain, Fang Ruohai already knew why it was impossible. If the market maker really wanted to affect Hang Seng, there would be no need to exert so much effort to push up the prices of seven individual stocks. Moreover, 3,000 lots was a very small amount in the stock market and wouldn’t have any significant impact. Even if the market maker were trying to manipulate Hang Seng, they wouldn’t act on such a small scale.
After analyzing the situation, Fang Ruohai widened his eyes—he knew it must be Xiao Ran. But he was even more confused: if he were targeting just a few stocks, the profits would be at least ten times greater. Why would Xiao Ran do this?
It wasn’t long before the source of those 3,000 lots was identified—it was indeed Xiao Ran. Fang Ruohai nodded in satisfaction. He didn’t want to take action for now and decided to observe the situation first. However, when the market reopened in the afternoon, he could no longer hold back.
Someone was even more impatient—Wang Yu was the first to speak up, looking at Fang Ruohai discontentedly, “Boss Fang, do you want to watch Xiao Ran make money and leave? If we’re going to act, it’s now!”
“There’s no rush. We don’t know how much capital Xiao Ran has. If we miscalculate, we could get into trouble!” Fang Ruohai remained calm, lighting a cigarette and taking a few puffs before continuing, “Besides, he can’t make much profit. With the current situation, someone will surely step in to support the market soon!”
As Fang Ruohai and Fang Xiaoqiang had predicted, around 3 p.m., the rate of decline began to slow down. As the market neared closing time, Tony finally spoke triumphantly, “Boss, now is the best time to act. I think the market maker will make a final move before the market closes to make investors panic. If you don’t act, Hang Seng will definitely drop below 100 points.”
“The market maker does intend to make a bold move before the market closes, to make investors panic, and then use some other tactics. By tomorrow morning, it could lead to a frenzy of selling,” Fang Xiaoqiang said, not with triumph but with a glint of wisdom, telling Xiao Ran, “Right now, we’re just sitting back and waiting for disaster. If Fang Ruohai plans to strike now, we might not be able to gain much!”
“This is the perfect time to figure out Fang Ruohai’s moves. Master, it depends on you to help!” Xiao Ran was extremely nervous—60 million! If this were a script, hundreds of such scenarios would be needed to earn that much. “Let’s just watch what happens!”
In fact, even Xiao Ran, who knew nothing about securities, understood that it was absolutely impossible to expose the fund just to protect existing interests. Basically, Xiao Ran didn’t want others to know he was the real owner of the fund, using it as a hidden strategy.
“They’re coming!” Fang Xiaoqiang exclaimed. Xiao Ran and Guan Xin’s hearts skipped a beat as they quickly leaned closer to the monitor. It clearly showed that someone had just bought 6,000 lots of Hang Seng futures to go up. In just that instant, Hang Seng rose by 10 points. Since one point was worth 50 dollars, this meant Xiao Ran’s profits for the day were reduced by at least 1.5 million.

And this was clearly not over yet. Xiao Ran watched with distress as the Hang Seng Index was pushed up by a full 37 points by those overwhelming 6,000 hands before the day’s battle finally ended. His hatred could hardly be described—just one move from those 6,000 hands cost him five million in profits.

Still, it wasn’t too bad. By the close of trading, the Hang Seng Index had dropped 71 points, allowing Xiao Ran to earn nearly ten million in just one move. It was extremely exciting. Xiao Ran knew the stock market could be profitable, but he never expected to make ten million in just one day.

However, he still felt it wasn’t as profitable as making movies. Currently, Hong Kong had the highest profits from movies globally. Hong Kong films were produced at extremely low costs and then sold in Southeast Asia, yielding profits dozens of times higher—no wonder they attracted capital from Southeast Asia.

Fang Ruohai smiled. He had waited until the end of the day to act and also made some profits. Though he didn’t value them much, he thought he might have figured out Xiao Ran’s weaknesses. At the end of the day, Xiao Ran failed to replenish his position in time and was hit by a sudden attack that knocked down dozens of points, clearly proving he had no more funds available.

But thinking of this, Fang Ruohai became cautious. He wondered if this was a false impression created by Xiao Ran on purpose. Given Xiao Ran’s personality, it was possible he would take such risks, but it was unlikely he would do so without reason.

In the following days, Fang Ruohai and Xiao Ran clashed secretly several times. But since the overall market trend was downward, Fang Ruohai couldn’t turn things around and could only calculate when the market maker would act again.

The securities market was now in a dismal state. Many unscrupulous investors like Xiao Ran were betting on the Hang Seng Index to fall, so Fang Ruohai had little success in those days. However, as more people began to support the market, the overall situation gradually stabilized, except for the three stocks chosen by the market maker, which continued to decline.

The actions of the market maker had little impact on the clashes between Xiao Ran and Fang Ruohai, as their battles took place in the futures market. Though Fang Ruohai couldn’t figure out why Xiao Ran was interested in futures with little fluctuation, he still competed with him in this area.

Over the past few days, the Hang Seng Index had dropped below 3,400 points, and Xiao Ran had earned 70 million just from those 60 million. Meanwhile, Fang Ruohai hadn’t suffered any losses and even made a small profit. This battle hadn’t yet reached a critical stage; everyone was waiting for the moment when the market maker would act.

“The market maker is secretly buying up stocks. I think it’s time for them to start their next move!” Fang Xiaoqiang said to Xiao Ran with ease. In fact, what he needed to do these past few days was very simple—just follow the market trend and the market maker, earning easily and quickly. “I believe they’ll start moving in a day or two!”

“By then, the Hang Seng Index will definitely rise. It might even gain hundreds of points in a day!” Rong Xiaoyi looked radiant. Her family certainly had some money, but they hadn’t made as much as she had in these few days. “Following Fang Ruohai’s tactics, he’ll definitely go against us. We buy up, he buys down—let him suffer huge losses!”

“Impossible!” Xiao Ran rubbed his nose. He didn’t think Fang Ruohai was the kind of person willing to go against money, and Fang Ruohai surely didn’t have the financial resources to confront the banker, which was why they were just slowly wearing each other down. Otherwise, Fang Ruohai would never have been so patient. It was inevitable that the Hang Seng Index would rise in a few days, and Fang Ruohai would never try to force it.

Rong Xiaoyi and the others immediately understood Xiao Ran’s meaning. By going with the trend, Tianxia Fund had secretly bought in and already made a small profit of 40 million. Fortunately, this action hadn’t harmed the banker’s interests; otherwise, they would likely have been dealt with right away.

Tianxia Fund’s name was chosen by Xiao Ran, so its meaning goes without saying. Now their funds amounted to over 210 million, which should be enough to take on Fang Ruohai. However, Xiao Ran didn’t think tomorrow’s battle would decisively defeat Fang Ruohai, because tomorrow they would be on the same side, strengthening themselves together.

But when would the actual confrontation take place? Perhaps Xiao Ran knew, or perhaps Fang Ruohai knew…

*****

On the 12th, that is, tonight, I will be visiting Sanjiang Pavilion. If you have time, be sure to come and support me.