Chapter Nineteen: The Manipulation Continues, Little Pleasures, and the First Loss

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Opening the Shanghai Copper 0912 contract, Yan Fei saw that prices were fluctuating around 46,450 yuan per ton. By 2:50 p.m., the day’s trading volume had reached 340,000 lots—50,000 more than the previous day and 90,000 more than the day before that.

Seeing the ever-expanding volume, Yan Fei immediately understood that the major players had begun moving in five trading days earlier. They had started building long positions, steadily buying in with small orders to avoid causing violent fluctuations.

Two minutes later, Yan Fei used repeated orders of more than a hundred lots to buy 4,000 lots of the Shanghai Copper 0912 futures contract. Just as he was preparing to continue buying, he alerted the major players. A massive long order suddenly surged forward, devouring every short contract above it and driving the Shanghai Copper futures price to 46,650 yuan per ton.

Seeing the major players scrambling to accumulate positions, Yan Fei immediately used all his remaining funds to go long. A huge order of 3,059 long lots burst from the depths like a giant whale rising from the sea, swallowing every short order above it at increasingly higher prices and directly pushing Shanghai Copper futures to 46,700 yuan per ton.

Looking at the 7,059 long Shanghai Copper futures contracts recorded in his account, purchased at an average price of 46,600 yuan per ton with a margin requirement of ten percent, Yan Fei saw that his total investment had reached 164.47 million yuan. Nearly 90,000 yuan had been deducted for handling fees and commissions, leaving 220,000 yuan in his account.

After establishing his position, Yan Fei glanced at the time. It was already 2:59 p.m.; only one minute remained before the close. The broader market fluctuated above 46,720 and ultimately closed at 46,730.

The day’s trading volume had reached 400,000 lots. There was still considerable room before it reached the peak of one million lots, but Yan Fei’s position already amounted to one-twentieth of the total open interest retained that day, making him an absolutely dominant force in the market.

Leaning back in his chair, Yan Fei increasingly felt that one person could barely keep up with everything. After all, each market had a limited capacity for capital. In the future, he would need more investment products, and it was time to put the stock market on his agenda as well. Although making money in stocks was slower, the risks were much lower, and more importantly, the market was large enough to accommodate sufficient capital.

Closing his eyes, Yan Fei replayed the day’s operations in his mind while forecasting the market’s future direction. The CSI 300 Index would probably continue rising for two days. He could close his position before the settlement date, then begin building short positions on the next trading day after settlement. After all, in the domestic A-share market, it was easier to make money by going short.

The capital tied up in the Shanghai Copper contract index had grown somewhat excessive. He would have to wait until trading volume reached one million lots before gradually unwinding his position. In the future, he would limit his position to around 100 million yuan and invest all remaining funds in international crude oil futures. After all, WTI crude oil futures were still in an upward trend.

As for the domestic investment markets, the Shanghai Aluminum futures market was roughly one-sixteenth the size of the Shanghai Copper futures market. The rebar market was currently only one-sixteenth the size of Shanghai Copper as well. It had been open for less than five months, so its low trading volume was perfectly normal. But Yan Fei believed that after the four-trillion-yuan infrastructure stimulus launched that year began pouring liquidity into the economy, the rebar market would continue expanding—and at an astonishing speed.

Opening the charts, Yan Fei began studying the rebar and Shanghai Aluminum futures markets. The Rebar 0912 contract had begun falling steadily from its August 4 peak of 4,998 yuan per ton. Today, it had closed at the daily limit down, reaching 4,218 yuan per ton, a five-percent decline for the day, with turnover exceeding five billion yuan.

The chart showed that rebar had already fallen in two waves. The first consolidation level had been 4,659. Based on his calculations, the second consolidation level was approximately 4,237. In other words, rebar would likely rebound for several trading days, but the rise would certainly be limited. Declines would remain the prevailing trend, because the chart was already trapped in a downward channel. Most likely, prices would eventually return to 3,600.

After pondering for a long while, Yan Fei decided to examine the rebar chart again the following day. If trading volume exceeded ten billion yuan, he would mobilize part of his capital and enter the rebar futures market.

After finishing his study of rebar futures, Yan Fei opened the Shanghai Aluminum futures chart and began analyzing it. Today, the Shanghai Aluminum 0912 contract had recorded turnover of nearly five billion yuan. The market had just undergone a major surge in the previous wave and was now correcting by one leg. Volatility had been intense over the past five or six trading days, and he estimated that prices would fluctuate violently within a narrow range in the days ahead. The profit potential would not be great, and the market’s capacity for capital was limited as well.

The two markets together could probably accommodate only around ten million yuan in capital. Yan Fei immediately felt a headache coming on and prepared to study soybean meal and sugar futures to see whether he could find markets capable of absorbing more funds.

As for domestic gold futures and international gold futures, the stability of gold prices meant there were no worthwhile short-term speculative opportunities. The bond market was even more stable than gold. His plan to invest in stocks had become an urgent matter.

Yan Fei opened the sugar futures market. Before he could begin studying it, his phone rang. He answered and heard Liu Suxin on the other end. Her laughter came through like the song of a lark.

“Senior, I don’t have class tomorrow. There’s a concert in the evening, and I’d like to invite you to go with me.”

Hearing Liu Suxin’s voice, Yan Fei’s face lit up with genuine delight.

“Sure. What time is it? And where is it? I’ll be there on time.”

Seeing that Yan Fei had agreed, Liu Suxin happily said, “Senior, I’ll come pick you up. Let’s have dinner together.”

Yan Fei agreed. After hanging up, he shut down the computer, stood up, and freshened himself up. He chose a T-shirt that made him look energetic, got ready, and went downstairs. He had only been standing by the roadside for a short while when Liu Suxin drove over.

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A breathtakingly beautiful face appeared through the car window, and Liu Suxin called out cheerfully, “Senior, get in!”

Yan Fei smiled and naturally took the front passenger seat. The two of them chatted as they drove, soon arriving at the private restaurant they had visited before. After parking, they encountered none of the melodramatic trouble from last time and went smoothly upstairs to enjoy their meal.

As one exquisite dish after another was served, Yan Fei’s stomach, accustomed to fast food every day over the past several days, began protesting loudly. He picked up his chopsticks and enthusiastically savored the food. Seeing him like that, Liu Suxin covered her mouth and giggled, her mood exceptionally bright.

While the two of them were enjoying their meal, a supercar pulled up outside the private restaurant. Zhao Qun got out and walked toward several other supercars that had already been parked there.

“President Wang, I reserved a private room here. We can eat and talk at the same time.”

Wang Wei got out of the car with his secretary and smiled.

“This place is nice. You’ve certainly put some thought into it, Little Qun.”

Five or six people followed Wang Wei and Zhao Qun upstairs. As they reached the turn in the staircase, Zhao Qun suddenly spotted Liu Suxin’s car. His expression froze slightly, but he recovered in an instant and led everyone into the private room.

Zhao Qun had recently taken over the family’s consumer electronics company, while Wang Wei was one of his clients. The others were business acquaintances from the same circle—some suppliers, some familiar customers. They had happened to meet while spending time at a private club, which was how Zhao Qun had come to host this dinner.

After settling his guests, Zhao Qun asked for Liu Suxin’s room number. He went to the door, knocked, and then pushed it open. When Liu Suxin saw him enter, her brows drew together.

Seeing that Zhao Qun was alone, the expression on Liu Suxin’s face softened slightly.

“Zhao Qun, you’re having dinner here too? Zhang Zhigao didn’t come with you, did he?”

Zhao Qun shook his head and looked at Yan Fei with a smile.

“I’ve taken over part of the family business, so I haven’t been running around with them lately. Your name is Yan Fei, right? Let me formally introduce myself. I’m Zhao Qun. How about we forget our previous misunderstanding?”

Looking at Zhao Qun’s smiling expression, Yan Fei could not immediately see through his intentions. He smiled in response.

“Sure.”

The two shook hands, and their past grievances were dismissed with a smile.

Liu Suxin frowned at Zhao Qun and asked, “Zhao Qun, what are you trying to do? This isn’t like you.”

Zhao Qun looked at her and smiled.

“People change. A remarkable man like Brother Yan is naturally someone I’d be happy to befriend. After all, we don’t have any profound hatred between us. Brother Yan, you two go ahead and eat. I’m going back to keep my clients company.”

Watching Zhao Qun’s retreating figure, Yan Fei guessed that his dealings with Liu Zhe had probably become known to these scions of powerful families. They must have concluded that befriending him offered greater value, which explained Zhao Qun’s sudden goodwill.

Seeing the puzzled look on Liu Suxin’s face, Yan Fei smiled.

“Let’s eat. Having one fewer enemy and one more friend is never a bad thing.”

The two sat down and continued chatting over their meal. More than ten minutes later, they finished eating and went downstairs. Liu Suxin was preparing to pay when Yan Fei spoke up.

“I’ll pay. I’ve made quite a bit of money from investing recently.”

Liu Suxin did not refuse. Yan Fei paid a little over two thousand yuan, settled the bill, and got into the car. Liu Suxin sat in the passenger seat while Yan Fei drove toward the Shen’an Grand Theater.

After parking, they entered with their tickets and took seats near the front. A few minutes later, piano music began to flow from the stage. The pure sound of the piano was extraordinarily beautiful, and both Yan Fei and Liu Suxin became immersed in its melody.

It was a concert of purely instrumental music. After the piano came solo and ensemble performances featuring the cello, violin, guitar, guzheng, and various other instruments. For the entire hour, both of them felt as though their souls had been cleansed. Only when the performance ended did the audience in the grand theater return to their senses, and thunderous applause filled the hall.

As they left the venue in an orderly stream of people, Yan Fei and Liu Suxin began discussing various aspects of instrumental music. They found themselves deeply engaged in conversation, and Liu Suxin’s impression of Yan Fei improved even further.

His foundation came from the hard work he had devoted to music in his previous life. As it turned out, understanding music made it easier to become a successful womanizer, giving one a considerable advantage when pursuing women.

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The car soon arrived at the urban village where Yan Fei lived. Looking at the harsh surroundings, Liu Suxin said, “Senior, now that you’re making money, it’s time to move somewhere else.”

Yan Fei nodded.

“I’ll look for an agent over the next couple of days and find a place in an upscale residential complex to stay for a while.”

After returning home, Yan Fei searched online for the phone numbers of several agencies and immediately began calling them. When one of them answered, he said, “I’m looking for a one-bedroom apartment with a living room in an upscale residential complex. Call me tomorrow evening once you’ve found something.”

A young man answered the phone and immediately assured him, “Please rest assured, sir. I’ve worked as a real estate agent for three years. I can definitely find a place you’ll be satisfied with. May I ask your surname...?”

The two chatted for several minutes. Yan Fei explained his requirements in detail to the agent, who called himself Little Li. After confirming the specifics, Yan Fei hung up and picked up a book to begin studying.

The next day, as usual, Yan Fei opened the Shanghai Copper 0912 futures chart. He saw that the volume during the opening auction had been less than 3,000 lots, while the opening price stood at 47,500—770 yuan higher than the previous day’s close.

Looking at the opening price, Yan Fei did not hesitate in the slightest. He immediately began unwinding his position in small increments, throwing several-hundred-lot orders onto the market. Yet he still could not suppress the enthusiasm of the longs. After all, the market had plunged sharply the day before, and a rebound today was the consensus expectation.

Under Yan Fei’s relentless selling, the Shanghai Copper 0912 contract rose slowly. Only after five minutes, with volume having expanded considerably compared with the same period, did it climb to 47,770.

By then, Yan Fei had closed 4,000 lots. He stopped placing orders gently and forcefully liquidated the remaining three thousand-plus lots in one stroke. The Shanghai Copper futures price instantly fell to 47,650.

After successfully closing the entire position, all 7,059 of Yan Fei’s long contracts had been liquidated at an average price of 47,680 yuan per ton. The available funds in his account had risen to 200.94 million yuan. The liquidation had generated a profit of approximately 36.25 million yuan, while nearly 100,000 yuan was deducted in fees.

After closing the position, Yan Fei pondered briefly and decided to continue going long. He studied the market for several minutes, then glanced at the time. It was already 9:15 a.m., and the A-share market had begun its opening auction as well. He placed nearly 100 million yuan at a ten-percent margin requirement, setting buy orders at 46,700 and going long on a total of 4,280 lots to support the Shanghai Copper futures price.

Once that was done, Yan Fei switched to the A-share market and checked the day’s opening auction. As he had expected, the market had opened higher and would probably continue rising. The CSI 300 Index would most likely close in positive territory.

Having reached those conclusions, Yan Fei stopped paying attention to the A-share market. He had no intention of closing his position that day and planned to wait until the settlement date the following day.

He opened the rebar futures chart and saw that trading volume had roughly doubled during the first twenty-odd minutes after the open. Yan Fei felt that the day’s total turnover might exceed ten billion yuan.

After watching for a minute, he confirmed that rebar futures remained in a downward channel. He therefore used a ten-percent margin requirement and began entering the market with a steady stream of small orders, using the remaining 100 million yuan in his possession to build a short position.

For the entire day, the rebar futures market was almost under Yan Fei’s control. Under the pressure of countless small orders of several hundred lots betting on a decline, rebar prices could not manage even the slightest rebound and remained locked in a sideways pattern with a slight downward bias.

By the three o’clock close, Yan Fei had finally deployed all his capital. His average transaction price was 4,220 yuan per ton, and he had traded a total of 23,694 lots, exhausting the entire 100 million yuan.

Looking at the rebar futures closing price of 4,270 yuan per ton, Yan Fei’s expression went blank. A trace of regret rose in his heart. Driven by reckless impulse, his account had suffered its first floating loss—and it had reached 11.847 million yuan.

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