Zhao Chen's fingers stopped on the table.
He stared at the news about Citron Research Report on the screen, his mind racing.
Then he made a decision.
"Chen Xi," his voice suddenly became very clear, "Sell all Options. No matter the cost."
Chen Xi was stunned. "Sell them all?"
"Yes. 5 million shares of Options, sell them immediately. I will accept the loss."
Su Wantang frowned:
"Xiao Chen, now sell Options, the market price has dropped a lot. Our cost is 31.2 US Dollar, now--"
She glanced at the Options quotation on the screen and paused in her voice. "Now there are only 27.8 US Dollar left."
Zhao Chen did not hesitate. "Sell. If it continues to fall, it won't even reach this price."
Chen Xi's fingers hung above the keyboard and hesitated for a second.
Then she took a deep breath and started entering commands.
5 million shares of Call Options, Strike Price 290 US Dollar, expiring in September 2018.
At this moment, the market price has dropped to 27.5 US Dollar--Panic Selling is still going on, Bid-Ask Spread is pulling extremely hard, and the buying orders are sparse.
The Options contract corresponding to 5 million shares is 50,000 (each contract corresponds to 100 shares), which is sold in ten batches.
The first batch, 5,000 contracts, price limit 27.5 US Dollar.
There was no purchase. She waited for three seconds and lowered the limit price to 27.2 US Dollar.
5,000 contracts were traded, with an average price of 27.2 US Dollar.
The second batch, 5,000 contracts, was sold with a price limit of 27.0 US Dollar.
The third batch, 5,000 contracts, was traded at 26.8 US Dollar.
The fourth batch, 5,000 contracts, 26.6 US Dollar. transacted.
The fifth batch, 5,000 contracts, 26.4 US Dollar. transacted.
The sixth batch, 5,000 contracts, 26.2 US Dollar. transacted.
The seventh batch, 5,000 contracts, 26.0 US Dollar. transacted.
The eighth batch, 5,000 contracts, 25.8 US Dollar. transacted.
The ninth batch, 5,000 contracts, 25.6 US Dollar. transacted.
The tenth batch, 5,000 contracts, 25.4 US Dollar. transacted.
All transactions were completed. The average price was 26.45 US Dollar.
Chen Xi removed his fingers from the keyboard, leaned on the back of the chair, and took a long breath.
Her fingers were trembling slightly.
"The average transaction price is 26.45 US Dollar." Her voice was a little hoarse.
"50,000 contracts, each contract contains 100 shares, 5 million shares. The total recovery is approximately 132.25 million US Dollar.
The cost is 31.2 US Dollar, 156 million US Dollar. Loss--"
"23.75 million US Dollar." Su Wantang reported the number next to it.
The office was quiet.
A loss of 23.75 million US Dollar.
This is the first transaction that ended in loss since Zhao Chen was reborn.
Zhao Chen looked at the number on the screen, his expression unchanged.
"Common Stock won't move." He said, "9 million shares of Tesla, one won't be sold."
Chen Xi turned his head and looked at him, his lips moved but he did not speak.
Su Wantang asked, "What if the stock price continues to fall?"
Zhao Chen said, "Don't sell if it continues to fall. Common Stock is Common Stock, and Options is Options.
The risk of Options is time, while Common Stock has no time risk.
As long as it's not sold, it's not a real loss."
What he didn't say was that he sold Options not because he was short on the long-term prospects of Tesla.
It's because he made a calculation:
If it falls from 360 US Dollar, the Premium of Options will fall from the current 27 US Dollar to waste paper and completely return to zero.
The market will never give him a chance to get September.
Short Sellers will smash the market one after another in the next few months until all the bulls are destroyed.
With a loss of 23.75 million US Dollar, buy a certainty that he will not be liquidated.
This price is not expensive.
The news that Era Vanguard was liquidating Options was spread before the market closed.
Not because of leaks, but because the selling of those 50,000 contracts was too obvious on the market.
27.5 US Dollar, 27.0 US Dollar, 26.5 US Dollar... The sales orders came one after another, driving the price of Options from 28 US Dollar all the way to 25 US Dollar.
Everyone has seen it - the giant crocodile who made 8 billion US Dollar on Bitcoin is cutting his flesh and leaving the market.
Bloomberg Terminal sent an alert before the market close:
"Tesla Options suddenly saw a huge amount of selling, and it was suspected that 'Era Vanguard' cleared Call Options.
It is estimated that the loss on this transaction exceeded 23 million US Dollar."
In CNBC's closing comments, the host's tone was laced with gloating:
"It seems that 'Era Vanguard' can't bear it anymore. The loss of 23 million US Dollar is nothing to them, but the signal is very clear - they are not optimistic about the short-term trend of Tesla."
The guest responded, "What's more noteworthy is that they only sold Options but not Common Stock.
This is very interesting. If they completely lost confidence in Tesla, why not sell Common Stock as well?"
The host thought for a while, "Maybe it's because Common Stock has insufficient liquidity? If 9 million shares are sold out at once, the stock price will collapse."
"It's possible. But there's another possibility - they don't want to sell.
Options has to be sold because Time Value is losing money. Common Stock has no time pressure and can be held on forever."
The guest paused and added:
"But the market won't think so. The market will only see one thing - 'Era Vanguard' has thrown in the towel."
Wednesday, January 24th.
After a night of fermentation, the news that Era Vanguard liquidated Options has spread throughout the global capital market.
When the Asia session opened, the OTC Derivatives of Tesla began to plummet.
Everyone is saying the same thing - "Era Vanguard is running away."
Panic spreads like a virus.
Those bulls who were frantically chasing prices two days ago turned into the most panicked deserters overnight.
No one cares about the detail that "Era Vanguard" only sold Options but not Common Stock.
The market only sees the result - the most determined bull is cut off.
After US Stocks opened, Tesla jumped directly and opened lower, Opening Price 334 US Dollar, which was nearly 10 US Dollar lower than yesterday's closing price.
Then it was a rapid decline.
Chen Xi was sitting in front of the computer, watching the numbers on the screen jumping rapidly, his face turned pale.
She looked back at Zhao Chen from time to time, but Zhao Chen made no sign.
He was sitting on a chair, holding the cup of cold tea in his hand, his expression as calm as a pool of stagnant water.
330 US Dollar.325 US Dollar.320 US Dollar.
It once touched 318 US Dollar during the session.
It rebounded slightly before closing, closing at 321.50 US Dollar. The single-day drop exceeded 6%.
Trading Volume is five times the usual amount.
Selling orders are surging, Buying Pressure is thin.
All the bulls are running, but one person is not moving.
After the market closed that day, the Wall Street Journal published an article with the title:
"Era Vanguard gave in? The mysterious fund cleared Tesla Options, with a loss of more than 23 million"
The article described in detail the losses of "Era Vanguard" on Options, and the resulting panic in the market.
At the end of the article it reads:
"What is most noteworthy is that 'Era Vanguard' still holds approximately 9 million shares of Tesla Common Stock.
If they also choose to clear their positions, Tesla's stock price will face greater downward pressure.
The market is waiting for their next move."