Chapter 249: Short Selling

In Yuehan Feishi's eyes, someone like Chen Mo, an unknown yellow‑skinned man, could not possibly have so much cash.

If the call Jimi scheduled hadn't come from the Pierre Hotel, he wouldn't have wanted to step in.

He hadn't expected that Chen Mo would actually produce that much money.

After a brief shock, Yuehan Feishi's professionalism let him quickly resume normalcy and handle the matter officially.

"Mr. Chen, given the scale of your capital, we can offer you the highest‑level trading permissions and a dedicated VIP trading room."

Chen Mo raised an eyebrow and smiled, "What I'm more concerned about is how many times leverage you can give me, and what the fee is."

"For a capital size like yours, our company usually can provide up to, but not exceeding, 35 times leverage.

However, since this is your first account with our brokerage and you have no prior US stock trading record, we can only offer you a maximum of 20 times leverage.

The fee is fifteen per ten thousand.

Yuehan Feishi's voice remained professionally steady, yet it carried a faint hint of tension and excitement.

If Chen Mo truly chooses 20× leverage, that means his operating capital reaches 6.8 billion dollars, a solid big‑player.

At that point, their firm would collect over a hundred million just in fees.

At this moment, behind Chen Mo, Gangsheng QiuDi and Ahua had not reacted yet, but Jimi and the two traders had already widened their eyes.

Six point eight billion dollars! What on earth is Chen Mo planning to do?

Chen Mo's expression remained unchanged as his fingers slowly tapped the tabletop; 20× leverage is already sufficient.

Even if Merrill Lynch truly offered him 35× leverage, he wouldn't use it for safety.

"I can accept 20× leverage, but the fee is too high; I can at most accept eight per ten thousand."

When doing business, it's all about haggling.

"Sorry, sir, the fee you request is too low; I'm afraid I can't accept. I can make a decision to lower your fee to twelve per ten thousand, which is the lowest quote I can offer."

Chen Mo shook his head, "Ten per ten thousand, that's my final offer; if you can't accept, I'll have to switch to another brokerage. I think Solomon Brothers would welcome me."

Solomon Brothers is another brokerage not inferior to Merrill Lynch, and the two have been in competition.

However, after the stock crash, many brokerages face bankruptcy crises.

To preserve capital, some brokerages forcibly cancel clients' trades, forcibly close clients' positions, and some even misappropriate clients' principal.

Solomon Brothers is one such firm.

Thus Chen Mo's choice has always been only one: Merrill Lynch, which after the crash still upheld its principles and hadn't gone bankrupt.

But Yuehan Feishi doesn't know Chen Mo's true intention.

He thought Chen Mo would really switch brokerages for a lower fee.

After a brief consideration, Yuehan Feishi could only agree to Chen Mo's quote.

Earning a little is better than earning nothing. Letting the opponent profit is even more painful than losing oneself.

"Mr. Chen, you win. 20× leverage, ten per ten thousand fee, I, on behalf of the company, agree."

Soon, Yuehan Feishi handed several revised documents to Chen Mo.

Chen Mo carefully checked them, confirmed no issues, and signed.

After securing the fund account, Chen Mo took a deep breath, his gaze sharp as a blade.

"I will use 300 million dollars to open a margin account, employ 20× leverage, and establish a short position in S&P 500 Index Futures."

Chen Mo's words thundered like a flash of lightning in Yuehan Feishi's ear.

"Mr. Chen, are you… sure?" Yuehan Feishi's voice trembled slightly.

Although since the end of August the US stock market has been falling, most people still remain optimistic about US stocks.

Especially the staff inside Merrill Lynch.

Merrill Lynch's Vice President and Market Strategist Yuehan L Haimensi has publicly bullish on US stocks more than once in major financial magazines and TV, earning him the nickname "Mr. Merrill".

His view essentially represents the attitude of most senior executives at Merrill Lynch.

Therefore, upon hearing Chen Mo's intention to establish a short position, he was so surprised.

This is completely opposite to Merrill's internal strategy.

"Mr. Chen, with a 300 million‑dollar margin, you can build a futures short position worth about 6 billion dollars."

Yuehan Feishi picked up the calculator beside him, began computing, muttering rapidly as if chanting, "Currently the December‑expiring S&P 500 Index Futures contract price is around 320 points, each point's contract multiplier is 500 dollars.

That means a single contract's current value is about 160,000 dollars.

Based on a total position of 6 billion, you need to sell roughly…"

Yuehan Feishi's fingers stopped tapping the calculator.

"… contracts."

That figure caused the air in the entire conference room to momentarily thicken.

"Sss—"

"Sss—"

The sound of air being sucked in repeatedly echoed in the conference room, as if trying to drain all the air.

Such a massive short order, if fully placed in the market, would inevitably stir up waves.

Yuehan Feishi's expression grew solemn as he asked, "Mr. Chen, are you sure you want to do this?"

Jimi couldn't help but say, "Mo Ge, are you playing way too big?"

Chen Mo ignored Jimi, his tone unquestionable, "Mr. Yuehan, I am certain of what I'm doing.

Please help me borrow the S&P 500 Index Futures contracts."

Yuehan Feishi thought Chen Mo was truly insane.

Although he shouldn't interfere with Chen Mo's decision, he couldn't help but point out the risks.

"Mr. Chen, I must emphasize that 20× leverage means market volatility will be enormously amplified."

"If the S&P 500 index rises more than 5%, your margin may face a call for additional funds; if it rises to or exceeds 5.5% and you fail to add margin in time, you will face forced liquidation, at which point not only will all your principal be lost, but you will also owe a huge debt."

"I know." Chen Mo answered succinctly, "My decision will not be changed."

"All right." Seeing Chen Mo insist, John also stopped advising, "Please go to the trading room and wait a moment; the contract will be in your account shortly."

John turned and left, leaving an assistant to lead Chen Mo and the others to a VIP trading room.

In the trading room, there is a Bloomberg terminal that can monitor market movements in real time.

It also has three dedicated phone lines for contacting the exchange to conduct trades.

After Chen Mo and the others waited in the trading room for several minutes, John arrived with a stack of documents.

"Mr. Chen, the contract you requested is ready."

A flicker of excitement crossed Chen Mo's eyes as he took John's documents and began to examine them.

A few minutes later, Chen Mo signed all the documents.

After John left, Chen Mo turned to look at the traders Hengli and Pite.

"The contracts, to sell them in multiple batches without alerting the market, how long will you need?"

Hengli and Pite frowned, thought for a long time, then whispered among themselves before replying to Chen Mo: "At least one and a half days are needed."

Chen Mo nodded and said: "Then let's begin. Before the market closes tomorrow, sell all the contracts for me."