Chapter 18: Intended to Face as a Retail Investor, Yet Became the Main Force

Closing the video, Yan Fei pondered briefly, a faint smile appearing on his face. He then opened the Shanghai-Shenzhen 300 Index market chart and saw the index had risen to 3124.58 points. The smile on his face grew more pronounced, and he understood that today’s market would definitely close in the green, with at least a 1% gain.

In the afternoon, the Shanghai-Shenzhen 300 Index continued to climb slowly, though the pace had become very sluggish, oscillating around 3170 points. At 2:40 PM, suddenly a large bullish order surged in, pushing the index up to 3180.24 points.

Yan Fei, who had been observing the market all day like a swift leopard, pounced suddenly. At the 3180 level, he slammed down a massive short order of 500 lots, devouring all the aggressively advancing long positions. The final average transaction price was 3179.58, and this move caused the Shanghai-Shenzhen 300 Index to plunge vertically, instantly silencing the bullish forces.

With Yan Fei’s large short order hitting the market, some retail and institutional investors followed by selling short, and the index was quickly suppressed, dropping sharply to 3170.24 points.

Seeing this situation, the bullish main forces immediately began defending the market, sending out a series of large buy orders to sweep away all the short sellers, forcibly pulling the Shanghai-Shenzhen 300 Index back upward. By the close, the index’s highest point of the day was 3186.24, and it settled at 3171.99.

Yan Fei’s 500-lot fixed short position was opened with 15% margin, costing about 71.55 million yuan. His account still held more than 24.33 million yuan after paying over 30,000 yuan in opening fees and commissions.

Looking at the remaining 20-plus million in his account, Yan Fei realized that although having more funds meant bigger profits, it was getting a bit overwhelming for one person. Moreover, the market’s capacity and regulations posed many constraints. The Shanghai-Shenzhen 300 Index futures had reached full capacity, and the daily trading volume of Shanghai copper futures was only around 300,000 lots. His 3,800 lots already counted as a main player, and increasing further would cause trouble.

After much consideration, Yan Fei thought only international crude oil futures and foreign exchange markets could accommodate such enormous capital. Since he hadn’t yet gained sufficient confidence in the forex market, he decided to place the funds temporarily into the crude oil futures market.

Taking out his phone, Yan Fei called Li Feng. Once connected, he said, “Uncle, I have 24.33 million yuan of idle funds in my Huaxin Futures account. I want to perform a cash flow exchange and convert it into US dollars, transferring it to my Citibank account.”

Li Feng replied, “I’ll arrange it right away. Are you planning to invest in crude oil futures? The market looks set for a sustained rise recently. It’s a good opportunity, though the increase may not be huge. Be mindful of the risks.”

“Understood, thank you for the reminder,” Yan Fei said gratefully. After hanging up, he sent some documents to Li Feng and stared at the international crude oil futures market, waiting for the US dollar transfer.

The September WTI crude oil futures contract (CLK09) was still hovering around $32.86 per barrel, with only seven days left until the August 25 delivery date.

Yan Fei watched the market for a long time. It wasn’t peak trading hours, so there was no shouting on the floor—only small electronic orders engaged in a tug-of-war between bulls and bears. Hours passed unnoticed.

Suddenly, his phone buzzed. Yan Fei glanced and saw the US dollar funds had arrived. He immediately deposited the $3.56 million into the international crude oil futures account, ready to go all-in on the long side.

To avoid causing significant market disruption, Yan Fei had to buy in gradually, absorbing short positions bit by bit. It took over two hours to fully enter the $3.56 million long position, with an average price of $32.84 per barrel and a total of 2,168 lots, still using 20x leverage.

Leaning back in his chair and watching the order book, Yan Fei’s phone rang. He answered promptly, smiling and saying, “Hello, Miss Chen, how can I help you?”

Miss Chen’s expression was serious as she said, “Mr. Yan, your position exceeds 1,000 lots, so you need to submit a large trader report to our company. I will send you a template via email shortly. Also, you must close your position 5 to 7 days before the delivery date. Individual investors cannot enter delivery day, and large traders must deliver early.”

Yan Fei frowned deeply. He realized that the WTI crude oil futures trading rules in this life differed significantly from the last. Previously, both large and small traders were only restricted from entering the delivery day.

After a moment’s thought, Yan Fei spoke solemnly, “Miss Chen, could I close my positions one trading day before the delivery date? As you can see, I just opened them.”

Miss Chen was silent for a moment, then said, “This is company policy. I will help you apply, but whether it’s approved depends on the circumstances. Please wait a moment.”

Hearing this, Yan Fei immediately brightened and said, “Thank you. I’m heading to the US soon—I’ll be sure to thank you in person.”

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Perhaps due to the few interactions with Yan Fei, Chen Yuting had a good impression of him. After hanging up, she immediately reported to her department manager, requesting an extension for Yan Fei’s position.

In the manager’s office, Chen Yuting explained Yan Fei’s request. Upon hearing the report, Manager Paul Hughes said sternly, “Sarah, you must understand this is company policy. Is Yan your friend?”

Chen Yuting thought for a moment, shook her head, and replied firmly, “Manager Paul, Mr. Yan is a major client of our company and a trading prodigy. With just over $100,000, he made more than $5 million in under a week. He will surely become a large client, bringing long-term benefits to the company.”

Paul considered Chen’s words carefully. Ultimately, he was convinced and approved Yan Fei’s request. Chen Yuting happily took the approval and left the office.

Yan Fei waited by his phone and sent the large trader report. Half an hour later, Chen Yuting called. Yan Fei answered immediately, nervously asking, “Miss Chen, is it settled?”

Chen laughed over the phone, “The application was approved. The company allows you to close your position anytime before the 24th. You cannot wait until the 25th; otherwise, the company will forcibly close your position at the opening on the 25th.”

Relieved, Yan Fei smiled and said, “Got it. Thank you, Miss Chen. I’ll thank you in person when I get to the US.”

After some casual conversation, they hung up. Yan Fei turned off his computer and began reading books about the forex market, staying up late into the night before finally going to bed.

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The next day, after waking and freshening up, Yan Fei checked the time and went for a jog along a trail. After half an hour, drenched in sweat, he returned to his rented apartment, showered, and ate breakfast. It was about 9:10 AM.

As on the previous day, Yan Fei opened the Shanghai-Shenzhen 300 Index market and checked the pre-opening auction of blue-chip and banking stocks in the large A-share market. Most showed signs of opening higher. By 9:25 AM, the auctions had ended, with most banks and blue chips opening higher.

At 9:30 AM, the Shanghai-Shenzhen 300 Index opened at 3178.28, up about 6 points—a very small gain. Yan Fei felt no panic; despite the high open, he still believed the market would fall sharply today.

After opening, the index surged quickly under the aggressive attack of bullish forces, breaking above 3180. Yet, no large short orders appeared.

Watching this, Yan Fei began doubting himself. His account had already shown an unrealized loss. If the market was truly being lifted by Chairman Liu’s public statements, then there would be no need for gold and silver to support the market anymore—just wait for Chairman Liu’s words.

Eyes cold and sharp like a seasoned hunter, Yan Fei remained calm, ready to strike at the slightest sign.

One minute after the open, the Shanghai-Shenzhen 300 Index reached 3183 points. Suddenly, the number of long orders on the book dwindled to almost nothing. Then a massive short order of over 2,000 lots slammed down, devouring countless long buy orders and driving the index down to 3165.25 points.

Following this large short order, countless smaller short orders emerged like mushrooms after rain—dozens or hundreds of lots flooding in, mercilessly slaughtering long positions and pushing the price further down.

Watching the steadily falling index, a faint smile appeared on Yan Fei’s cold face. He then switched his computer screen to the Shanghai Copper Futures September contract order book.

Today’s opening price was 48,290 yuan per ton; currently, it had dropped to 48,000 yuan per ton—a decline of 290 yuan within minutes—with intense battle between bulls and bears.

At the 48,000 level, hundreds of lots of long orders continuously emerged, struggling to hold back the fierce assault from shorts. Both sides wrestled back and forth around the 48,000 yuan mark.

Suddenly, a massive order of tens of thousands of lots crashed through the 48,000 price level, engulfing all the long positions beneath. It then fell steadily, eventually settling at 47,560 yuan.

Staring at the order book, Yan Fei clearly sensed the shorts’ ferocious momentum crashing in like a tidal wave—strong and relentless, showing no signs of exhaustion. The downtrend was far from over.

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By the midday close at 11:30 AM, Shanghai copper futures had settled at 47,100 yuan per ton. The bulls had been dominated all morning, and any attempts at resistance were quickly shattered.

Looking at the frozen screen, Yan Fei felt that if the bulls didn’t mount a defense in the afternoon, the price could continue falling, possibly even hitting the daily limit down.

After lunch, Yan Fei checked the Shanghai-Shenzhen 300 Index and found it had closed the morning session at 3,086.45 points, just as he had predicted. He expected further declines in the afternoon.

Taking out a pen, Yan Fei began calculating and set a series of dozen-lot sell orders within the 3,000 to 3,010 range, preparing to close out all his 500-lot short position.

Yan Fei’s reasoning wasn’t that he doubted the index would fall further, but that August 21 was the delivery date for the Shanghai-Shenzhen 300 Index futures. In the last two trading days, hedging funds would definitely enter to buy. Facing such massive capital with superior privileges, any shorts daring to resist would be doomed.

After setting the series of closing orders, Yan Fei left his desk and resumed reading about the forex market. At 1:00 PM, he returned to his computer and opened the Shanghai Copper Futures market.

The price continued to fall from 47,100 yuan, but the decline was tough, as bulls organized strong resistance with hundreds of lots of large buy orders.

The shorts, seeing the bulls’ fierce defense, refused to yield and continued hammering down large orders, pushing the copper price below 47,000 yuan, still falling.

Within the first minute after open, bulls and bears fought fiercely, with over 30,000 lots traded. The battle ended with the shorts victorious, and the price quickly dropped to 46,500 yuan.

Countless retail and institutional investors, seeing the shorts take full control, rushed to sell as well, with many small orders flying out like snowflakes, further driving prices down.

Yan Fei watched as copper prices fell to 46,000 yuan, just a few hundred yuan from the daily limit down. Not waiting any longer, he immediately closed out all 3,805 lots of his short positions.

With this large closeout, the downward pressure on copper prices was instantly controlled. Prices reversed and climbed up to 46,100 yuan, moving away from the critical 46,000 yuan threshold.

Minutes later, Yan Fei successfully closed his 3,805-lot short position at an average price of 46,120 yuan per ton, booking a profit of over 42.36 million yuan. Adding this to his initial capital of 92.2 million yuan, his total account value reached 134.56 million yuan.

Looking at his over 100 million yuan in funds, Yan Fei didn’t rush to open new positions. Instead, he opened the Shanghai-Shenzhen 300 Index market and saw the index had fallen below 3,000 points. His entire 500-lot short position had closed at an average price of 3,004.56, with an unrealized gain of 26.2 million yuan. Adding his previous principal of 71.55 million yuan, his total account value was about 97.75 million yuan—nearly 100 million.

Yan Fei shifted his gaze from his account to the index market, now at 2,995.84 points, pondering whether to snatch a piece of profit from the hedging funds. Although that might offend the hedgers, his maximum was only 500 lots, so it probably wouldn’t be a big issue.

He gritted his teeth and stopped hesitating, immediately placing small long orders repeatedly. Within less than a minute, he had filled his 500-lot limit at an average price of 3,001.24, still using 15% margin, costing about 67.53 million yuan, leaving around 30.22 million yuan in his account.

Having settled the Shanghai-Shenzhen 300 position, Yan Fei opened the Shanghai Copper Futures September contract market again. It was about 2:45 PM, with prices hovering around 46,400 yuan, seemingly set to close near this level.

Suddenly, Yan Fei noticed the day’s trading volume and frowned. The volume was just under 300,000 lots, estimating the close might reach about 330,000 lots, which was a decrease from yesterday’s 360,000 lots. More importantly, today’s sharp drop occurred with shrinking volume.

Realizing this, Yan Fei instantly understood that the active period for the September contract was ending. The copper main forces would surely shift to the December contract, so to follow them, he must move to the December contract as well.