Tuesday, January 26th.
New York Time is six forty in the morning, and Lin Shicheng is already sitting in front of Trading Desk.
Saturday and the public opinion fermentation on Sunday have made GME's pre-market popularity reach a higher level than Friday--
WallStreetBets Forum's weekend traffic hit a record high, and DFV's live channel subscriptions exceeded two million.
The two topics "GameStop" and "Retail Investors Awakening" alternately occupy the top of the hot search list on Twitter.
But what really alarmed Lin Shicheng was the pre-market bidding data.
The pre-market price of GME jumped from the closing price of 224.6 yuan on Friday to 238 yuan. The depth of Buying Pressure was nine times the selling price.
More importantly, the Short Selling data he received from the prime broker at six o'clock in the morning showed--
The total position of the Short Sellers camp dropped from about 38 million shares of Friday to 32 million shares.
Short Selling The proportion dropped from 41% to 35%.
"Short Sellers is continuing to close positions." Chen Mo came over with coffee and took a look at the data.
"But it didn't level fast enough."
Lin Shicheng stared at the screen,
"Melvin has less than one million shares left on Friday. They have to close the market at the opening today.
Point72 still has five million and Citadel has three million. These are hard liquidations, not active withdrawals."
"Where can I borrow coupons?"
Lin Shicheng switches to the borrowing data page.
"GME's pool of available securities has dropped to less than two million shares.
In the past three days, retail investors on WallStreetBets Forum have locked up a large number of positions - they bought and then did not sell, and the brokers had fewer and fewer stocks to borrow.
Short Sellers wants to borrow new bonds to roll over the old position, but it can no longer be borrowed."
"So Short Sellers has only one way to close the position."
"Yes. If they can't borrow new bonds, they can only buy back the stocks to repay the bonds. Buying back the stocks will push up the stock price.
Pushing up the stock price triggers the hedging of Market Maker Buying Pressure. This is a death spiral."
At 7:03 in the morning, Lin Shicheng called Zhao Chen.
"Two hundred and thirty-eight before the market. The total position of Short Sellers has dropped to 32 million, and the proportion of Short Selling has dropped to 35%. The number of borrowable securities is less than 2 million shares."
Zhao Chen was silent for two seconds on the other end of the phone. "How much does Melvin have left?"
"Less than a million shares. Point72 about five million. Citadel three million."
The remaining 23 million are retail investors Short Sellers and new entrants like Iceberg."
"Melvin must finish today. Their prime broker gave an ultimatum from Friday."
"Then what are we going to do today?"
"Sell the second batch for more than 250 yuan. The target is 1 million shares, and the average price is controlled between 250 and 300.
Options will start closing positions today - first close the two levels of Strike Price at 25 and 30.
The income from each contract has exceeded one hundred times, it's time to collect."
"Understood. After Common Stock sold one million shares, our position dropped from 9.8% to about 7.8%."
"Yes. But don't sell it all at once. Place orders in batches, no more than 30,000 shares each. Let the market digest it."
"Received."
At 9:15, it was the last round of pre-market bidding. GME was fixed at 242 yuan.
At 9:28, CNBC's camera cut to the studio.
The host speaks very fast--
"GameStop exceeded 240 before the market opened. US Dollar. The Short Sellers camp is experiencing its final stampede.
We have received news that Melvin Capital may be forced to close all remaining Short Position positions today.
If this news is true, this will be one of the largest single-day Short Sellers losses in United States financial history."
At nine-thirty, the market opens.
The first transaction price of GME was 243 yuan. Thirty seconds later, it exceeded 250 yuan.
On the trading screen of Lin Shicheng, the Buying Pressure depth of the order book is stacked at a position of 250 yuan with nearly 5 million shares piled up.
The hedging of investment banks Buying Pressure and the lock-up of retail investors Buying Pressure were superimposed, and the selling orders were so thin that they were almost invisible.
"Two hundred and fifty-three." Chen Mo said,
"The investment bank's Gamma hedging at seventy-five and one hundred levels has not ended yet.
New gamma levels of one hundred to two hundred have begun to accumulate again."
At 9:47, GME touched 262 yuan.
Lin Shicheng picked up the phone and dialed Trading Desk.
"The second batch of sales has begun. The target is one million shares, and the price is between 250 and 300.
Place orders in batches, each order not exceeding 30,000 shares."
The trader starts executing.
On the screen, the sell orders of Era Vanguard flowed into the market like a trickle--
At a position above two hundred and sixty yuan, each sale will cause the price to briefly drop one or two yuan, and then be quickly pushed back by Buying Pressure.
At 10:08, GME touched 275 yuan.
CNBC's scrolling news strip read --
"Melvin Capital is reported to be closing the last Short Position position, and the average buying price is about two hundred and eighty US Dollar."
Lin Shicheng When he saw this message, the pen in his hand stopped for a moment.
Two hundred and eighty yuan. The average cost of Melvin's Short Position is about twenty yuan.
They closed their position at $280, losing $260 per share.
Their total Short Position peaked at over 20 million shares.
In this battle, Melvin lost more than 5 billion US Dollar.
"Melvin is closing the position." Chen Mo said,
"One hour after the market opened, their prime brokers were scanning the market. The buying volume was about 300,000 shares per minute."
"Where's Point72?"
"It hasn't happened yet. But their prime broker is already asking if they can arrange Over-the-Counter Block Trade."
"No one answered."
"No one dares to pick up the call. If you do, you're going against the entire WSB."
At 10:20, GME exceeded 280 yuan.
On Lin Shicheng and Trading Desk, the progress bar of the second batch of sales has reached 60%.
600,000 shares have been traded, with an average price of 273 yuan. The remaining 400,000 shares are still pending orders.
At 10:33, GME hit two hundred and ninety dollars.
Melvin's position closing order has finally been completed.
The last million shares were bought between 285 and 290.
Short Selling The proportion dropped sharply from 35% to 24%.
The total position of the Short Sellers camp dropped from 32 million shares to 23 million shares.
Point72 followed suit before midday.
Five million shares of Short Position were liquidated between 280 and 300. The proportion of Short Selling further dropped to 18%.
"Melvin is cleared. Point72 is cleared."
Chen Mo stared at the screen,
"Citadel is running. Their prime broker is asking for prices, but they haven't taken action yet."
At 11:47, GME touched 302 yuan.