Short Selling - Bonus Chapter Sponsored by Fan Erlin 68

Short Selling a common financial trading practice.

Bu Peien's stockbrokers use a simple and intuitive method, such as "buying big or small," to explain what bullish and bearish are to clients who know nothing about the market. This simple and direct explanation makes it easier for clients to understand what they are facing.

To be more specific, if a financial product costs 100 yuan each, and A borrows one from B and sells it to other buyers, then A will have 100 yuan.

After some time, when the price of the product dropped to fifty yuan each, A bought back one product for fifty yuan and returned it to B.

In this transaction, A profited fifty dollars by taking advantage of the price difference due to the decline in the commodity price; this is the process of profiting from Short Selling.

If the price of goods doesn't fall but rises, you'll lose money based on the increase.

Of course, this is just a simple overview. In reality, there are other factors that need to be added to the overall profit and loss calculation, but in general, this is roughly the principle of Short Selling.

Lin Qi wanted to lend money to Mr. He Bosi, He Bosi would then exchange the money for other currencies. When the Galil became worthless, he would buy the money back at the price of waste paper and return it to Lin Qi. What he would have left in his pocket was his profit.

But would Lin Qi be such a kind person?

This is a problem, a big problem.

Mr. He Bosi did not think Lin Qi was a good person, for a simple reason: Lynch had just stated that his purpose in doing so was to get revenge for a harmless joke he made two years ago.

So, is what he's saying now true? Is it genuinely a matter of principle, and he wants to help him out, or is it a new trap? Mr. He Bosi ' emotions were in turmoil; he was finding it difficult to concentrate. The impending bankruptcy gave him an urge to urinate. He brought his legs together and asked, "How much?"

He asked Lin Qi how much money and how many Galil he could borrow. If Lin Qi had enough cash on hand, he might be able to recover his losses.

He thought about it briefly, and just like the previous deal, he couldn't find any problems. But at this moment, he didn't have time to weigh the pros and cons; he had to find a way to solve these problems as soon as possible.

Once Galil completely collapses, he will have no chance left.

Seeing Mr. He Bosi's unwilling expression, Lin Qi smiled happily. "Wait a moment..." He gestured for Mr. He Bosi to sit down for a while, and then went into the inner room and picked up the phone.

His voices, faintly piercing through the slightly ajar door, reached Mr. He Bosi ' ears; Lin Qi seemed to be asking these questions.

Thinking about this, he began to wonder if Lin Qi had set a trap for him again. Meanwhile, Lin Qi was on the phone with Lyme, asking, "Do we or our clients still have any Galil in stock?"

"We've cleared out our own stock, but our clients still have quite a bit..." Lyme couldn't help but chuckle as he spoke, "At least a billion or two billion are in the hands of our clients."

"I previously informed all our clients, as you suggested, that Galil carries significant risks and that I did not recommend they hold it. But as you know, Galil has been rising and has recently experienced a substantial increase, so they proactively requested to use their brokerage accounts to follow the trend and enter the market, so..."

Lyme stopped there, and then he laughed lightly. Lin Qi knew what he was going to say, and he knew that Lin Qi could guess what he meant.

When faced with problems they don't understand, people often exhibit a polarized state.

In the first scenario, individuals whose knowledge, status, wealth, and power belong to the lower or middle class of society lack a distinct independent mindset and have not achieved any success. These individuals are often persuaded by those who are more professional than themselves.

Being persuaded doesn't mean they're easily swayed; rather, it means they genuinely lack confidence in things they don't understand. They can only rely on professional advice from experts, which is why Bu Peien's stockbrokers often appear as negative examples in legal programs or publications.

Individuals in the second category may not be very knowledgeable, but they are all successful people.

They possess sufficient social status, wealth, or power; in simpler terms, these are successful people. Successful people have their own judgment and are not easily persuaded by others; they have more faith in their own judgment.

When their judgments and Lyme's suggestions clearly conflict, Lyme, who has not yet fully proven himself to people, is not capable of convincing them. They do not believe Lyme's judgments; they trust their own past successful experiences and intuition more.

This led to the fact that the slightly poorer clients of Lyme's (who were actually at least Middle Class and much wealthier than the common people) obediently refrained from investing in Galil, while the wealthy large accounts bought Galil in droves.

About 20% of the Galil in Lin Qi's possession were taken by them, and the rest were also acquired by various parties through various means, since it was spot goods!

Not long ago, those who made money from the positive news were discussing Lyme's capabilities behind the scenes. But then, Galil was hit by a series of negative news, Galil also took a sharp turn for the worse, causing many people to lose a lot of money.

Lyme didn't feel uneasy at all; on the contrary, he felt a sense of pleasure. It seemed quite enjoyable to see these disobedient people suffer. When he talked about this with Lin Qi, his tone was full of joy.

"Well done, much better than I expected..."

He initially thought he hadn't cleared out his Galil, since clearing out 10 billion Galil in a short time would require considering market capacity.

Before making the call, he thought there might be about three or four billion left, and he could get some back from the client at a very low price to make up a slightly more rounded figure to lend to Mr. He Bosi.

He just hadn't expected Lyme to complete the task so well, having already sold everything off. Of course, this was also related to the fact that international speculators had started to speculate wildly on Galil.

The market was overheated and all participants were in a frenzy. At this point, let alone 10 billion in spot goods, even several times more, as long as Lin Qi had it, the market would be willing to take it all! After praising Lyme a few times, Lin Qi hung up the phone and, after a short pause, called Mr. Truman's desk.

"You're in trouble?" The moment the call connected, Lin Qi heard Mr. Truman's distinctive laughter.

At that time, international calls were still handled manually, so Mr. Truman already knew who was calling before he even answered the phone. There was only one possibility that Lin Qi was in trouble when he called him at this time.

Mr. Truman was intrigued by the trouble that Lin Qi had to call for help; he wanted to know who had such power to stump Lin Qi.

Lin Qi chuckled twice. "Yes, I've run into some trouble. I need the authority to transfer 10 billion Galil in cash. After thinking it over, the only thing I can offer right now is the Federal Government."

This request was outside of Mr. Truman's expectations, and he asked with some curiosity, "What about your ten billion?"

"I sold everything when it was almost at its peak..."

Even if Mr. Truman wasn't very knowledgeable about economics and finance, he knew what this meant: Lin Qi had made tens of millions in profit from this deal.

This also reminded Mr. Truman of Lin Qi's resistance every time he tried to persuade Lin Qi to join him. Perhaps he really was suited for this kind of thing. Over the years, no one had ever seemed to make money more easily than Lin Qi.

After a brief moment of distraction, a hint of envy flickered in his eyes, which quickly turned into curiosity. "So what do you want this money for?"

"You know, I have a friend, Mr. He Bosi, who is planning to borrow a sum of money from me, ten billion Galil."

"I figured the Federal money was just sitting there anyway, so I might as well use it to do business."

"Within three months, the return rate will be no less than 4.5% of the total loan amount. Settled in Federal Sol, it will be roughly..." Lin Qi quickly calculated the current Exchange Rate, "At least three million in benefits. This deal is very profitable."

Mr. Truman's curiosity was clearly not about that. "So how much can you earn?"

"It's about that number..."

Will this money leave the Federal?

Of course not!

When are you coming to complete the procedures?

"Soon!"

Lin Qi, who came out of the room, smiled and sat back down on the sofa. "I've got it sorted out for you. 10 billion Galil in stock, with a 9.5% return on the loan, settled in Federal Sol. If there are no problems, you can have your people handle the formalities now."

Seeing how casually Lin Qi had produced another "ten billion," Mr. He Bosi wanted to ask a question, "Is the ten billion you mentioned the same ten billion I mentioned?"

But he didn't speak. At this moment, he didn't dare to offend Lin Qi, and this was his last chance.

If he were to repay the money he owed to others now, and also dispose of other money, he calculated that he could still make a profit! The reason for this profit was that he didn't plan to inform anyone else; he intended to keep all the profits from the short selling for himself, which would allow him to make a considerable amount.

The journey from hell to heaven can be instantaneous. At that moment, he had no concern for the lives of others; he only cared about himself.

"Don't even mention a 9.5% total interest rate, I'd be willing to take it even if it were 15%!" He said impatiently, "No problem at all, Mr. Lin Qi. So, how do we proceed with the formalities?" A smile appeared on his face.

Lin Qi wrote down a number for Mr. He Bosi, "This is the phone number of the head of the Loan Department head office of Jinhui Bank. You will need to provide collateral. You know, I can't lend you 10 billion Galil without asking for anything in return. Once you have the collateral, you will see the money..."

After watching Mr. He Bosi leave, Lin Qi dialed the number he had given Mr. He Bosi. "Hello... Yes, someone will be coming to your place in the next couple of days..."