Hong Kong Island. Far East Club!
When Li Yi and his group arrived at the Far East Club, Zhang Qiusheng, Lan Xinyi, and the others were already waiting for them at the entrance.
Without much small talk, Li Yi led his group inside the Far East Club, following Zhang Qiusheng.
The Far East Club was not some triad organization, but a stock exchange—its full name being Far East DXMBang Stock Exchange Limited!
It was the first securities exchange founded by Chinese people and is currently one of the four major securities exchanges on Hong Kong Island.
Once inside the company’s conference room, both parties engaged in a thorough discussion regarding the terms of their partnership, after which they proceeded to sign the contract.
After signing the contract, Li Yi didn’t rush to deposit the funds into the account; instead, he first met with the members of Lan Xinyi’s team.
To Li Yi’s surprise, seven of the eight members of Lan Xinyi’s team were women, and the only man turned out to be Lan Xinyi’s own brother, Lan Xinming.
Li Yi once again reiterated the disciplinary requirements for the duration of the project to the entire team. He was well aware that people in the financial services industry, like them, could easily leak your investment plans if left unsupervised.
On the brighter side, these people were simply following the trend and investing on their own—something Li Yi didn’t object to. “I get the meat, you get the broth; no big deal.”
What he feared most was that if these people saw him dominating the stock market and secretly revealed his plans to their own bosses, that would be a major problem.
Therefore, when signing contracts with these individuals, a non-disclosure agreement was an absolute must.
But relying solely on a piece of paper won’t give you peace of mind; you also have to confiscate their communication devices and keep someone watching them closely at all times.
Until the mission is over, they can’t go anywhere.
Clearly, these people are aware of the situation; they all claim to be professionals who would never disclose a client’s investment plan.
After taking care of all that, it was already nearly noon.
Li Yi immediately led everyone out of the Far East Exchange to grab a bite to eat, planning to get to work right after dinner.
Since they were set to begin work in the afternoon, Li Yi took Lan Xinyi, Lan Xinming, and the others for a quick bite near the exchange, then returned to the exchange.
Once Lan Xinyi and the others were back in the exchange’s VIP lounge, Li Yi immediately summoned all the traders and began outlining his investment plan.
However, when Lan Xinyi and the others heard Li Yi’s plan, they were all stunned!
“Mr. Li, are you suggesting we short the Hang Seng Index—and with five times leverage?” Lan Xinyi asked, looking utterly shocked.
“Yes. Is there a problem?”
Hearing Li Yi’s retort, Lan Xinyi looked at him with an expression that was less shock and more like she was looking at a fool.
It’s not that you can’t short Hong Kong stocks, but shorting with 5x leverage is simply too reckless.
Before Lan Xinyi could speak, Lan Xinming, standing nearby, couldn’t help but interject, “Mr. Li, have you ever traded stocks before? Do you even know what shorting and going long mean?”
“Are you questioning what I said?” Li Yi replied coldly.
“No, but as the trader you hired, I have a duty to remind you: this isn’t how you play the stock market!” Lan Xinming said with a serious expression.
He truly hadn’t expected his employer to be this reckless. This wasn’t investing at all—it was essentially treating himself like a complete sucker.
After all, short selling is a form of derivatives trading, and derivatives are notoriously difficult to control—especially leveraged derivatives. One misstep could send him plummeting into an abyss.
“Thank you for the warning, but this is a one-time exception!”
Li Yi then turned to Lan Xinyi and said, “Miss Lan, as I’ve said before, no one is allowed to question my decisions throughout this process. I hope you and your team keep that firmly in mind!”
“Yes, Mr. Li. This is the last time!”
Clearly, Lan Xinyi understood her place far better than her brother did.
The client is an adult, investing their own money, and naturally must take responsibility for their own decisions.
On the contrary, people like them were merely tools; there was no need to overstep their bounds and make decisions on the employer’s behalf.
That said, she, like her brother, believed that Li Yi’s investment plan was nothing short of a high-stakes gamble with a very low probability of success—and that the tens of millions invested were likely to be lost entirely.
Short selling demands exceptional judgment from investors. When you predict a stock price will fall, you must borrow the corresponding shares from an institution in advance to sell them. Once the stock price drops as you anticipated, you buy them back at a lower price to return to the institution, and the resulting price difference is your profit.
Leverage, on the other hand, comes into play when you don’t have sufficient capital—or when you want to turn a small investment into a big return—and need to borrow money from a brokerage firm.
With 5x leverage, if you have 20 yuan in principal, the exchange lends you 80 yuan, allowing you to trade with 100 yuan to achieve five times the profit you would have otherwise earned.
Of course, the exchange isn’t a charity. Once your losses exceed 20 yuan (your margin), your entire position will be forcibly liquidated, leaving you with nothing.
Many people enter the market full of confidence, only to plunge headfirst into the abyss—and Li Yi is clearly one of them.
Li Yi could see right through Lan Xinyi and the others’ thoughts, but he didn’t care in the slightest.
“Since there’s no problem, let’s get started!” Li Yi said casually.
“Yes, Mr. Li!”
Lan Xinyi then immediately addressed the rest of the team: “Everyone, change into your uniforms right away. We’re ready to start!”
Upon hearing Lan Xinyi’s order, the rest of the team quickly changed into their uniform vests and got down to work.
At that time, Hong Kong Island still used a blackboard quotation system because there weren’t many listed companies.
Bids were written on the blackboard by floor representatives using chalk and displayed publicly; when a trade was confirmed, the seller would cross out the number. This crossed-out number represented the bidder’s seat number—the same number we see on the red vests worn by the people on the trading floor.
The vests were red to make them bright and eye-catching, making it easier for the recorders below to document each transaction, which would then be finalized and settled.
Because of this manual record-keeping system, all transactions are required to be completed within 48 hours—a process quite different from the standardized margin trading and short selling practices we see in today’s stock markets.
During peak trading hours, you’d see them lining up to write orders and pass notes—which is exactly why Li Yi hired these people in the first place.
With such a massive volume of trades, he simply couldn’t handle it all by himself!
As Lan Xinyi and her team got down to business, Li Yi immediately instructed Huang Lixing to transfer the entire 42 million yuan to the Far East Association, which backed Lan Xinyi, and then launched this massive, earth-shattering operation.
Once Lan Xinyi and her team confirmed the funds were in place, they immediately followed Li Yi’s instructions and used their accounts to “borrow” large quantities of Hang Seng Index futures.
The total price of a single Hang Seng Index futures contract is calculated as the latest Hang Seng Index point value multiplied by the contract multiplier of 50. With the Hang Seng Index currently at 1,810.2 points, the total price of one futures contract is 1,810.2 × 50, or 90,510 Hong Kong dollars.
Since futures trading operates on a margin system, investors are not required to pay the full amount; they only need to deposit 20% of the margin, or HK$18,102.
Li Yi has an investment principal of 42 million HKD. With 5x leverage, his available trading capital amounts to 210 million HKD.
Soon, under the direction of Lan Xinyi and her team, orders for 11,600 Hang Seng Index futures contracts were placed.
But what happened next sent Lan Xinyi and the others into a cold sweat, and everyone’s expressions turned grim!