As the night gets darker, the neon lights of Manhattan high-rise buildings reflect their colorful and cold brilliance on the rain-soaked streets.
World Clock in Suite quietly crossed the threshold of Capital Time on Monday morning,
The electronic trading matching system of Tokyo and Singapore's Asia Session began to sporadically jump out of the earliest quotation bubbles.
Zhao Chen is sitting in front of Main Console, and Bloomberg Terminal in front of him is putting JPMorgan Chase (JPMorgan),
The real-time market making quotations and implicit pending orders of Citigroup (Citadel/Citi) and Goldman Sachs Commodity Desk (Commodity Desk) are presented in real time in the form of heat maps.
Su Wantang placed the freshly brewed Espresso in Zhao Chen's hand, bent down slightly, looked at the intricate Derivatives hedging network on the screen, and asked curiously:
"Retail investors on Xiao Chen, WallStreetBets Forum are now shouting, 'Force JPMorgan Chase to liquidate',
But judging from the pre-market orders placed by these investment banks, they don't seem to be panicking at all?"
"Panic?"
Zhao Chen chuckled, picked up the coffee and took a sip, his eyes as cold as ice,
"Wantang, JPMorgan Chase in the eyes of retail investors, is a huge behemoth that relies on Short Selling Silver to earn the price difference;
But in the eyes of the real top Wall Street players, Market Maker never bet on direction, they bet on 'volatility' and 'liquidity'."
Shen Zhiyi presented a newly encrypted internal report of Wall Street OTC (OTC) Market Maker on the side of the display screen, and his slender fingers crossed the data link:
"Director Aunt Zhang and I analyzed the position structure of JPMorgan Chase as of last weekend Silver Derivatives.
Retail investors thought that Market Maker only had Short Sellers positions, but in fact, JPMorgan Chase locked Physical Silver Warrants in London LBMA Underground Vault,
As well as the Calendar Spread (Calendar Spread) position established on COMEX, the scale is unimaginable."
"This is the biggest blind spot in retail investors' cognition, and it is also a trap carefully laid out by investment banks."
Zhao Chen stretched out his finger and pressed it on the densest area of the Bloomberg Terminal heat map:
"When retail investors rushed in to buy SLV's Call Options (Call),
The investment bank that sold Options does need to buy Silver Futures or Spot to hedge Delta-Neutral.
On the surface, this seems to be helping retail investors push up silver prices;
But in fact, while investment banks are selling Options, they are pushing Implied Volatility (Implied Volatility) to historical extremes."
Zhao Chen's tone was cold and thorough:
"The higher the volatility, the more expensive the Premium (Premium) of Options will be.
Now retail investors buy a piece of SLV Out-of-the-Money Options with Strike Price at 30 US Dollar, and the cost they pay is three to five times the usual price!
Investment banks hold nearly unlimited Spot chips and over-the-counter OTC quotas, and they are happy to see Silver being driven to the sky by the emotions of retail investors within 48 hours."
"Because the higher the price of silver soars, the more Premium investment banks will harvest at high levels."
Shen Zhiyi answered, with a cold light in her beautiful eyes,
"When retail investors' follow-up Buying Pressure cannot keep up, or CME (Chicago Mercantile Exchange) takes action to increase the margin,
Once the silver price stagnates, Implied Volatility will instantly occur 'IV Crush' (IV Crush).
At that time, even if the price of Silver does not drop much, the Call Options bought by retail investors will instantly return to zero due to the sharp drop in Time Value and volatility!"
"Yes, this is the top harvesting logic of Wall Street - use retail investors' Euphoria to sell the most expensive garbage to retail investors."
Zhao Chen stood up and walked to the huge Floor-to-Ceiling Window Suite, overlooking the heart of this empire ruled by capital:
"The traders of JPMorgan Chase and Goldman Sachs are probably sitting in Trading Room of New York and London,
While drinking Champagne, I laughed while reading the passionate posts on WallStreetBets Forum.
Retail investors think they are wielding the sword of justice, but in fact they are just dedicating their own flesh and blood to Market Maker's huge balance sheet."
Su Wantang was slightly lost in thought and frowned slightly:
"Since investment banks have laid such a sure-fire trap, aren't retail investors destined to be massacred?"
"This is the cruelty of the capital market. Carnival without liquidity constraints is destined to be a castle in the air."
Zhao Chen turned around, smiled and touched the side of Wantang's face,
"However, the investment banking network also has a fatal weakness -
That is, in the first 48 hours before retail investors' emotions broke out, in order to maintain Delta-Neutral,
They must unconditionally buy Common Stock and futures at a high price of Secondary Market.
This resulted in an extremely steep slope in a very short period of time."
Shen Zhiyi's beautiful eyes lit up and he quickly caught the killer move in Zhao Chen's logic:
"Therefore, we will never go head-to-head with investment banks, nor will we act as the savior of retail investors.
Our Over Eighty Million US Dollars SPV funds are essentially a Bloodsucking Needle inserted between retail investors Buying Pressure and investment bank hedging orders!"
"Smart."
Zhao Chen looked at Shen Zhiyi with approval,
"We lurked in at the low level where volatility had just started and took the cheapest Out-of-the-Money Options.
The moment when the madness of retail investors pushes volatility and prices to peaks at the same time,
Market Maker had to take over the order at a high price in order to hedge, so we threw all the Options in our hands back to Market Maker.
By the way, the money of retail investors and Market Maker will be taken away together."
At this moment, the green light on Encrypted Communications Terminal on the table turned on, and the voice of Lin Shicheng came from New York Trading Desk:
"Zhao Zong! Asia Session is officially open!
The electronic trading board of Hong Kong, Singapore and Tokyo instantly flooded into a large number of Retail Buy Orders.
Spot Silver (XAG/USD) jumped higher and stood directly on 28.50 US Dollar/Ounce!
SLV's pre-market OTC quotes are soaring crazily!"
Zhao Chen's eyes suddenly darkened, like a black hawk sitting on the treetops that instantly locked onto its prey.
"Lawyer Lin, Chen Mo, Start First-Stage Orders."
Zhao Chen's voice was calm and resolute, revealing unquestionable domineering power.
"Six Independent SPV Accounts, in accordance with the compliance split logic planned by Zhiyi,
Spread the Over Eighty Million US Dollars principal evenly on the SLV Call Options Chain of 25 to 30 US Dollar in the form of algorithmic orders."
"Received! The order has been issued, and the algorithmic order is being completed quickly through Dark Pool!"
Lin Shicheng responded loudly on the other end of the phone.
On the screen of the console, six trickles of funds belonging to Era Vanguard were instantly hidden among the flood of buying orders from hundreds of thousands of retail investors around the world.
Each transaction is too small to attract any regulatory attention, but when aggregated together, it forms an extremely astonishing fishing net for huge profits.
Shen Zhiyi keeps an eye on Compliance Monitoring Screen and confirms that the position line of a single account is stable and below the supervision Warning Line;
Su Wantang silently handed Zhao Chen the latest copy of International Commodity Anomaly Report. The three of them looked at each other and smiled, with a tacit understanding.
Outside the window, the night sky Manhattan is still dark, but this trillion-level commodity gamble,
With the jump of Asia Session, the bloody and violent prelude has officially begun.