Chapter 77: Only I Have My Own Law Chapter 77 Excess Profit

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Protagonist:

Chen Yi

Tang Xiongfei went to contact the bank again.

But this time, institutions including Mellon Bank were all taking a wait-and-see attitude, not daring to readily agree.

Capital leverage is a double-edged sword; while improving capital efficiency, it increases its risk.

In normal futures operations, 10x and 20x leverage are relatively common, 50x leverage is already an extremely risky operation, meaning a 2% market decline (counter-trend operation) would result in total loss.

100x and 200x leverage only appear under very special circumstances, such as current high-frequency trading; because of its own low-risk high-capital characteristics, Gold Source International was able to get Mellon Bank's accommodation.

As for even higher multiples, even a leverage hailed as brilliantly designed would inevitably pose huge risks to the bank, because the market changes it can withstand are less than 5%; if stop-loss is too slow and the bank can't find someone to take over positions in a short time, then it would lose its own money.

This is something financial enterprises find hard to tolerate.

Tang Xiongfei ran around for half a day but couldn't get a positive response, and could only report back to Chen Yi dejectedly.

The latter said "I see" without much concern, and continued to raise both arms, doing Knight Step Combat Training.

The so-called one day without practice is like rowing upstream. By today, he had become somewhat familiar and accustomed to body technique cultivation.

It is said that once reaching the level of combat arts, pure physical training would no longer play an important role. But most Holy Qiao People cannot cross that hurdle, and Chen Yi himself never thinks about these things.

Chen Rongxi sat in front of the computer, merely finding Second Brother's training method strange, little knowing this was the crystallization of intelligence and technology tempered by a certain ethnic group over hundreds of thousands of years.

Chen Yi glanced at his little sister, took out a bottle of Energy Recovery Potion from the cabinet locked behind him, one bottle for himself and one for his little sister, saying: "Sports drink."

He casually closed the cabinet door, and the password lock made a click, automatically resetting.

"You're hiding it really tight." His little sister laughed at him, gulping down the Energy Recovery Potion, saying: "Tastes lighter than Red Bull. Give me the bottle?"

"What use is taking this back?" Chen Yi said, but didn't stop her.

The Holy Qiao People's craftsmanship was surprisingly exquisite, but besides complex patterns, there were no special words on it; it could only be a beautiful glass bottle.

The two on the China side did nothing, while Tang Xiongfei was busy contacting various banks, handing all high-frequency trading matters over to experienced traders.

This young man from Texas, while filling out required documents and inputting them into the computer, shouted excitedly: "This job is too fun, too fun."

How could it not be fun?

Behind his operation software was the "Siren" supercomputer worth hundreds of millions of US dollars; let alone a small trader, looking across all of Wall Street, who has used it?

Using such a heavy weapon to operate millions of US dollars in the stock and futures markets is like driving a tank down a pedestrian street—an incomparable advantage, exhilarating enough to make one tremble. Even if the surrounding crowd is handsome or beautiful, they still have to make way.

Tang Xiongfei's heartbeat almost jumped along with the numbers on the account; every time he spoke with a new bank manager on the phone, he had to look at the numbers on the account again.

After a while, he asked softly: "Mr. Chen, earning 30,000 US dollars in one hour—isn't that a bit too fast?"

"This is Wall Street; 30,000 US dollars is just a weed."

"Other high-frequency traders seem not to have so much profit." Tang Xiongfei said this behind others' backs; he was alone in the United States, and his expectation for safety was indeed greater.

Chen Yi thought for a moment, could understand his worry, his voice softened a bit, and said: "Other traders still rely on exchange rebates to make money; their capital restriction rate is high, and they often go hungry despite eating everything, so proportionally, we naturally earn more."

He actually concealed one thing: his own computer was more advanced, with faster reaction speed, so he could eat the fatter food before other traders.

Tang Xiongfei looked suddenly enlightened.

Chen Yi continued: "Today's trading time is half over; contact the bank tomorrow, no need to immediately demand 300-400x leverage, just increase it a little bit. Even adding 10x leverage means a return rate of over 10% of principal for us. Also, keep in touch with major exchanges; once our trading volume increases, ask them for higher rebates, especially smaller exchanges—pay special attention."

If it were a high-frequency trader, when capital is small, they would usually stay at a certain exchange to get higher rebates. Chen Yi relied on the advance of Lightning Trading to make money, so he could only divide his attention.

"Understood." Tang Xiongfei stood up with a swish; he himself didn't realize that his current attitude was completely different from before in the Domestic country.

The notebook computer on the desk made a whirring fan sound; in the quiet early morning, it became increasingly annoying.

The "Siren" worked even harder.

The administrators far away in Wisconsin had no idea their treasure had fallen into someone's clutches; single-mindedly, based on the computing volume shown on the screen, they increased processors and memory.

But those numbers also came from Chen Rongxi's settings.

Unless someone systematically analyzed the Siren, they probably wouldn't find any clue.

One day passed, sneaking away like a mouse.

The New York Stock Exchange closing bell rang; Chen Yi brewed himself a cup of tea, the water in it being Energy Recovery Potion boiled for barbecue—exclusive formula, effect unchanged.

He handed Chen Rongxi a bottle of juice brewed with Energy Recovery Potion, saying: "You don't need to be busy anymore; sleep well, leave the rest to the accountant, and don't let Mom know."

"I definitely won't." His little sister smiled cunningly, like a fox's sister.

Chen Yi patted her head again and asked in English: "Tang Xiongfei, calculate the accounts faster on your end."

Since Gold Source International was established, the commercial inheritance in his genes seemed to be activated all at once. Or perhaps the leisure of Family life allowed him to calmly face tens of thousands of yuan in nervousness.

Tang Xiongfei was different; he excitedly answered in both Chinese and English "Yes, yes," then continued: "Our account has 230,000; give the bank around 1,000 in interest, and the rest is almost all pure profit, so awesome."

In just one day, the principal expanded from 100,000 US dollars to 200,000. Even drug dealers, to get this huge sum, might have to be busy for more than half a year.

The financial world is the true world vortex. All their inventions and creations, all services and work, are to suck away the wealth created by the world—ironically, while sucking away others' wealth, they indeed greatly increased the speed of others' wealth creation, just that the former is far greater than the latter.

Chen Yi had long expected this, smiling slightly: "After making the specific account books, you can go rest. Starting tomorrow, we'll continue with 230,000 principal."

Everyone laughed heartily, but unlike Chen Yi's smile, many still harbored a bit of doubt. This doubling speed—let alone a few months, even one or two weeks—could match traditional enterprises' years of hard work, always giving an unreal feeling.

Even that Texas kid had never seen such an appreciation speed on Wall Street.

Chen Yi had no worry at all.

Let alone this is profit without calculating fixed asset depreciation; even if real, it wouldn't count as Wall Street's strongest profit growth speed. In history, countless financial institutions grew at an astonishing speed amidst various new technologies and intelligence games, and then became big sharks.

In Wall Street's pool, steadily growing small fry equals feed.

On the other hand, if the supercomputer's cost were truly accounted for, a "Siren" worth 1 billion US dollars with a 4-year design life would have daily depreciation of 680,000 US dollars; plus double maintenance costs, even if daily gross profit reached 1.44 million US dollars, profit would be only 80,000 US dollars.

However, the reality is he doesn't have to pay any supercomputer costs, while Wall Street's brokerage firms neither use such expensive machines nor do "Lightning Trading" with just 100,000 US dollars.

For them, capital amount is not a problem at all; under 200x or even 1000x leverage, 100 million US dollars can be used as 20 billion or even 100 billion, and organizations that can take out 1 billion US dollars in cash are as numerous as ox hairs.

So high-frequency traders were forced to reluctantly limit their trading scale only because they were constrained by their computers' trading volume, the exchange's capacity, and the size of the entire market.

Like any financial invention of any era, high-frequency trading, from the day of its birth, carried the countless expectations of financial capitalists—a stable, lossless arbitrage tool, a water pump drawing nourishment according to market scale and capacity, with whose help New York's financial companies could finally fairly print money for Earth, and never fear it would not be repaid.

Now, Gold Source International formally announces its entry into the ranks of Earth's usurers.

The following Wednesday. Gold Source International's profit rate was 75%, actual profit exceeding 170,000 dollars.

Thursday. Gold Source International's profit rate was 85%, actual profit exceeding 340,000 dollars.

Friday. The frenzy before the weekend greatly increased stock price differences, Gold Source International's profit rate soared past 130%, actual profit reaching 960,000 dollars.

Thus, four days of lightning trading brought a total profit of 1.6 million dollars, increasing Chen Yi's cash on hand to 1.7 million.

Not to mention Tang Xiongfei and others' various expressions, even the Mellon Bank reviewer responsible for small company project audits stared dumbfounded.

A major bank reviewer providing capital to Wall Street, mainly engaged in securities business, could be called well-informed, but he had never seen a stock company complete trades of over a million shares at a rate of nearly double daily returns and 16 times weekly profit.

In certain single or combined trades, this situation occasionally occurs, but a single trade for four consecutive days?

Before Monday arrived, the reviewer notified Tang Xiongfei: Gold Source International's short-term leverage was raised to 265 times.

Among companies under 10 million dollars, this is the maximum limit.

Tang Xiongfei immediately notified Chen Yi.

Unexpectedly, Chen Yi, whose appetite had already been whetted, immediately replied: "Raise it to a level similar to Getco."

They are currently the most famous high-frequency traders, their leverage is between 500 and 1000 times.

Tang Xiongfei nearly fainted; after hanging up the phone, he counted on his fingers, how much is 500 times 1.7 million dollars.

……

May Day third update arrives

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