Chapter 35: The Great Penguin's Ambush, the Terrifying Power of the Bulls

Under the promise of generous rewards, the employees of Momo Technology, spurred on by Yan Fei’s combination of strict discipline and grand incentives, erupted with intense passion. Everyone was as energized as if they had been injected with adrenaline, their eyes burning with the fervor of battle.

As the tasks were assigned, the entire company began to operate at high speed. The technical department worked overtime to add features, while the publicity department contacted major internet platforms to launch a massive advertising blitz. They even reached out to a currently trending blockbuster director, planning to embed Momo’s advertisements within his upcoming film.

Watching the bustling crowd, Yan Fei left with satisfaction. He took the elevator to the 20th floor to inspect the newly established private equity firm. Although the company consisted of only about 30 people, it was sufficient for a startup. Yan Fei gathered everyone in the main conference room for the firm’s first official meeting.

Scanning the group, Yan Fei said in a deep voice, "We are launching our first equity fund with a scale of 60 million. I will bring in a high-net-worth client to invest 20 million, and the remaining 40 million will be raised by Manager Zhang Long’s sales team. This is our firm’s inaugural private equity fund; it will be built as our benchmark, and the returns will be extremely impressive."

After setting the goal, Yan Fei turned to the technical manager, Qian Shuyi, and said sternly, "The quantitative auxiliary system needs an initial application model developed within two days. It must include basic functions like order splitting, order scanning, settings for order volume and timing, automated trading, one-click order placement and cancellation, and market statistical analysis. Can this be done?"

Qian Shuyi immediately replied, "Boss, these are basic functions with mature modular technology available. The technical team can finish it in three hours."

"Good. Manager Qian earns a credit. I want to see the quantitative auxiliary module installed on my computer by this afternoon," Yan Fei praised, rewarding him for his efficiency.

Time flew, and by two o'clock in the afternoon, Yan Fei sat in front of his computer, testing the quantitative auxiliary functions for futures trading. After an hour of testing, the performance was excellent; it significantly increased trading speed, expanded his profit margin by 20%, and successfully secured 40 million in intraday trading profits.

Meanwhile, at the headquarters of Big Penguin, in an investment department office, a trader monitoring the market suddenly shouted, "Boss! There’s activity on the Shanghai Copper futures market. Yan Fei’s account has engaged in massive trading, with a total turnover reaching over 600 million."

"Boss, the Rebar futures market has also shifted. Yan Fei’s account is trading heavily there as well, with a turnover of 700 million."

"Boss, the CSI 300 index has changed. Yan Fei’s account is closing positions, with a turnover of over 100 million."

"Boss, Sugar futures..."

"Boss, Soybean futures..."

As the traders continued to report, investment manager Zhang Zhenguang shouted with a serious expression, "Start the ambush immediately! Everyone, mobilize the funds at your disposal, keep your eyes on the board, and execute counter-trades against Yan Fei."

Minutes later, the traders stopped their actions because Yan Fei’s sudden movements today had occurred too late, and all markets had closed for the day.

Scanning the market, Zhang Zhenguang said coldly, "Report the results."

"Boss, we ambushed over a thousand lots in Shanghai Copper, and we are currently at a slight profit."

"Boss, we ambushed over three thousand lots in Rebar, with a slight loss."

"Boss, the CSI 300 index..."

Following their reports, Zhang Zhenguang frowned. Feeling somewhat powerless, he said, "I understand. Summarize Yan Fei’s position status, and I will go report to the boss."

Leaving the office, Zhang Zhenguang went to Chairman Ma Teng’s office. He sat before Ma Teng and said gravely, "Boss, the daily turnover of Shanghai Copper futures exceeds 160 billion. It is nearly impossible to ambush Yan Fei there. And for Rebar..."

"Bang!" Ma Teng slammed his hand on the table, cutting Zhang Zhenguang off. "I don’t care what you think. Just complete the mission. Spare no expense to ambush Yan Fei and ensure he doesn't make a single penny in the secondary market."

Looking at Ma Teng’s fierce and determined expression, Zhang Zhenguang took a deep breath and said, "Understood, Boss. We need the quantitative auxiliary system and another 5 billion in capital."

After a moment of contemplation, Ma Teng asked, "How certain are you?"

Zhang Zhenguang thought for a moment and said, "Eighty percent, provided we have the Quant-Square quantitative auxiliary system."

Ma Teng responded, "If it were 10 billion, how certain would you be?"

A flash of light shot through Zhang Zhenguang’s eyes as he replied with absolute confidence, "One hundred percent."

"Good!" Ma Teng said coldly. "The company will allocate 10 billion to you. I will send someone to communicate with Quant-Square to provide you with quantitative auxiliary support."

While Big Penguin was plotting to ambush Yan Fei, Yan Fei sat before his computer, frowning at the strange movements in the tail-end of the market. He couldn't understand why this was happening; neither from a technical perspective nor from a capital flow perspective should such an anomaly have occurred. Was it a sudden piece of news he wasn't aware of?

Many others with sensitive trading instincts shared Yan Fei’s thoughts, frantically checking for information, but they all came up empty-handed. Yan Fei sighed, shaking his head, assuming he had overthought it.

The next day, Yan Fei was at his computer by 8:50 AM, staring at the Shanghai Copper futures market. He had over 10,000 lots held, with 10x leverage. His own capital was 250 million, the market value of his positions exceeded 2.6 billion, and he had a floating profit of over 100 million.

Time ticked away, and soon it was the call auction period. A long order of 300 lots surged in, pushing the price to 54,210 RMB per ton, followed by a short order of 350 lots that knocked the price down to 54,200 RMB per ton.

During the full four minutes of the call auction, everything was perfectly normal. Even the one-minute trading stage between 8:59 and 9:00 showed no abnormalities, and no news reached the market. Yesterday’s tail-end anomaly seemed more like a glitch.

Yan Fei breathed a sigh of relief. Five minutes after the market opened, the trend was normal. From both technical and capital trends, it was clear that Shanghai Copper futures were in a bearish trend and would likely stabilize around 48,000.

The five-minute movement was almost exactly as Yan Fei had predicted. The price of Shanghai Copper futures fell from 54,210, dropping nearly 100 RMB within five minutes, increasing Yan Fei’s floating profit by over 5 million.

At this moment, at Big Penguin, Zhang Zhenguang looked at the data sent by the personnel he had bribed at the futures exchange, his expression thoughtful.

A few minutes later, Zhang Zhenguang looked at the traders and shouted, "Yan Fei’s cost basis is 56,220. He holds about 10,000 short positions with 10x leverage. Now, concentrate all funds into the Shanghai Copper futures contract. Drive the price up and liquidate Yan Fei’s positions!"

"Yes!" The traders, energized, immediately followed Zhang Zhenguang’s orders. Using 10x leverage to form a capital scale of over 100 billion, they unleashed massive orders of ten thousand lots.

Just then, Yan Fei, who was resting against his office chair, suddenly saw a ten-thousand-lot order pop up on the screen, charging straight toward the limit-up price. It instantly pulled the Shanghai Copper futures price to 54,950, causing his expression to change drastically in shock.

This massive long order, surging out like a dragon emerging from the sea, shocked countless people watching the market. For a moment, everyone froze, wondering what major event had occurred.

Amidst the widespread shock, this large order was merely the fuse. One long order after another surged like dragons rising from the abyss, devouring all short orders above them. In less than a minute, they drove the Shanghai Copper futures price to the limit-up.

In that minute, the market turnover exceeded 40 billion, setting an all-time high, shocking countless people and drawing the attention of everyone, including all official regulatory agencies.

Yan Fei looked at the Shanghai Copper price of 57,460 RMB per ton. His floating profit of over 100 million had turned into a loss of over 62 million. Countless others holding short positions were in the same predicament as Yan Fei.

Looking at the ever-increasing long positions at the limit-up buy price, which had reached a scale of 65 billion in just one minute, a sense of overwhelming dominance was displayed, declaring to all short-sellers that this limit-up was dictated by the buyer.

After two minutes of shock, Yan Fei regained his composure. He didn't act, but patiently waited for news, knowing this situation was far from normal. A terrifyingly large institution must have arrived to force the price to the limit-up.

Countless people guessed the same thing, frantically making calls to inquire about the news and capital sources. Soon, word spread that this massive amount of capital originated from a single trading institution.

With their suspicions confirmed, countless short-sellers began looking for ways to save themselves. Because the 60-billion-plus long buy wall made it impossible for any short-sellers to close their positions, if the long side continued this way tomorrow, even if the short-sellers faced liquidation, they wouldn't be able to close their orders. Such losses would lead every short-seller to the rooftop.

At this moment, the phones at the China Securities Regulatory Commission (CSRC) were ringing off the hook. Countless short-sellers complained that large capital was maliciously going long, violating market trends, and manipulating Shanghai Copper futures prices, demanding the CSRC punish them severely.

Some influential short-selling institutions and individuals also called the leaders of the CSRC, demanding that this rally be declared invalid and forcing the large institution to withdraw its long positions.

The leaders of the CSRC, overwhelmed by calls, felt their heads spinning. A dozen senior officials immediately held an emergency meeting. In the spacious office, Chairman Liu looked at everyone and said in a deep voice, "Commissioner Li, have you clarified the situation?"

As Commissioner Li was about to speak, the phone on the table rang again. The same situation occurred for other commissioners. Everyone looked at their phones with helplessness—answering was difficult, and not answering was equally impossible, as the callers were either friends or people who could not be offended.

Chairman Liu looked at his incessantly ringing phone, muted it helplessly, and said with a serious expression, "Mute everything. Let’s discuss how to handle this."

Commissioner Li said, "Chairman, colleagues, the source of the capital is Bohai Securities. According to the data monitored from our market, this capital utilized 10x leverage, magnifying the scale to 100 billion, but Bohai Securities has not disclosed the source of the funds."

"How bold!" Chairman Liu slammed the table and shouted, "To manipulate the Shanghai Copper futures market so blatantly and then dare to resist investigation—I think Old Li’s Bohai Securities doesn't intend to stay in business."

Commissioner Cheng said, "Chairman, perhaps we should reverse the trades and freeze the associated accounts at Bohai Securities to give the market and the public an explanation."

Chairman Liu pondered for a moment, shook his head, and said, "First, find out the source of the funds to avoid any accidents."

At the same time, Li Qianyi of Bohai Securities was drenched in sweat, his hands trembling uncontrollably as he muttered, "Pick up the phone, please pick up the phone!"

After a series of beeps, the call was finally connected. Li Qianyi cried out, "My master, please withdraw the orders! Doing this will kill us!"

Zhang Zhenguang’s voice came over the phone, "Manager Li, I cannot make that decision. Please wait a moment; I won't hang up. I will ask Manager Ma to speak with you."

Minutes later, Zhang Zhenguang arrived at Ma Teng’s office, put the call on speaker, and said, "Manager Ma, Manager Li from Bohai requests to speak with you."

Ma Teng frowned and asked, "Manager Li, what is the matter?"

Li Qianyi cried, "Manager Ma, please let me off the hook. If you do this, our Bohai will face extremely severe penalties."

Ma Teng’s expression remained unchanged as he said indifferently, "Manager Li, don't worry. Big Penguin can handle this. We are bullish on the Shanghai Copper market and simply bought a bit more; it's quite normal. Don't worry, I will have a word with the CSRC."

Hearing this, Li Qianyi smiled. This was the effect he wanted. As long as Big Penguin took the heat, the consequences wouldn't fall on him. He offered a few flattering words and hung up.

Looking at Zhang Zhenguang, Ma Teng said, "No need to hide it. Let it out: Big Penguin is bullish on Shanghai Copper. The current price is still in a low-value space with significant room for growth. From tomorrow, proceed according to trading rules. Breaking the rules this time is to tell everyone that Big Penguin is determined, but this can only happen this one time. Understand?"

"Understood!" Zhang Zhenguang said firmly, "Please rest assured, Boss, we will completely crush any of Yan Fei’s investments."

Ma Teng waved his hand, dismissing Zhang Zhenguang. He then took out his phone and called Liu Yuan of the CSRC. After it connected, he said with a smile, "Chairman Liu, it’s been a long time. Let me host a dinner today to catch up."

Liu Yuan’s heart sank; he instantly realized the 100-billion in capital came from Big Penguin. He understood the warning behind Ma Teng’s call. Under pressure, Liu Yuan said, "I understand Manager Ma’s intentions, but our CSRC cannot just do nothing, can we?"

Ma Teng smiled and said calmly, "It’s just normal market operation. Don't worry, Chairman Liu; we will return to the regular path by the end of the day. Our holdings will strictly comply with total position ratios. Today’s move was merely to announce to everyone that Big Penguin wants the position of the market leader in Shanghai Copper futures."