Yang Weibin knew he had to grit his teeth and decide to use the last of his reserve funds.
This is the margin he uses to protect his gold position from extreme volatility.
Under immense pressure, Yang Weibin called the American trader: "Transfer $5 million back from the American account."
That same afternoon, an American trader called from overseas, his voice trembling with tears: "Boss! You can't transfer the money! Absolutely not!"
"Why?!"
"The exchange just issued a warning! Due to potential systemic risks and market liquidity concerns, they have temporarily increased the margin ratio for all gold futures! Our accounts must be replenished immediately. Our 20 million yuan principal corresponds to a 100 million yuan position. The margin ratio has been temporarily increased by 3%, so we need to replenish 3 million yuan. Otherwise, our position will be forcibly reduced!"
The traders are about to have a breakdown.
Why is China getting involved in this mess all of a sudden?!
Gold prices began to fluctuate due to panic triggered by rumors of acquisitions by mainland Chinese funds.
That down-on-his-luck guy caused such a huge delay, he deserves to die!!
"Boss, what do we do now? If we can't raise 3 million by noon tomorrow, the consequences will be unimaginable!"
"I will handle it."
Yang Weibin hung up the phone.
He looked out the window.
The eastern horizon began to turn white.
A new day is about to begin.
He had less than twelve hours left.
Anderson arrived as promised and even brewed him a cup of black tea: "I'm sorry, but the board's decision cannot be changed. The remaining 15 million must be received by January 20th."
Yang Weibin didn't touch the tea: "What if I used the profits from gold futures as collateral? My position is currently showing a floating profit of over $9 million."
Anderson leaned forward slightly, his eyes calm, and said in a low voice, "That's exactly the problem, Mr. Yang. You use your real business as collateral to get loans from us, and then invest those funds in high-risk international speculative markets. In our risk assessment model, this is called leveraged nesting, which is one of the most dangerous structures."
He turned the leather folder on the table around and pushed it towards Yang Weibin.
It was a detailed report that listed all the cash flows of Weibin International over the past three months.
The conclusion on the last page is highlighted in red: The client has concentrated more than 85% of its liquid assets in a single speculative position, violating the principle of risk diversification.
Recommendation: Reduce risk exposure immediately; otherwise, initiate early loan recall procedures.
"Who gave you this data?"
Yang Weibin lowered his eyes.
He already had a plan in mind.
It's all about He Yuxiang...
A madman who would stop at nothing to seek revenge.
The funny thing is...
He delivered the letter himself!
Anderson smiled and said, "Mr. Yang, the bank has its own information channels, and your recent stock selling is not a secret in the market."
Yang Weibin understood.
He Yuxiang not only spread rumors in the market, but also delivered detailed intelligence precisely to each creditor.
Really...
Well done!
Even his schemes weren't exactly novel.
It's a complete copy.
"What if I could pay off 15 million today?"
"That would be ideal, but according to the contract, if your US position is subject to forced liquidation, regardless of the reason, we will have the right to demand that you immediately repay the full principal."
"This is an unfair contract term."
"This is risk management, Mr. Yang. Have a good day."
Anderson left.
It is now 11:48 a.m., and there are 12 minutes left until the deadline.
Yang Weibin became the financial director and converted all HK$3.2 million in the company's account, which was originally intended to pay for the raw materials next week, into US dollars and transferred it to the United States.
"This will bring the production line to a standstill, and suppliers will no longer give us any credit."
Do as instructed.
At 11:59 a.m., the phone rang. Yang Weibin took a deep breath and answered the call.
The trader said in a trembling voice, "Boss, we haven't paid the required margin, and the system has already started the automatic forced liquidation procedure."
Yang Weibin gripped the receiver tightly: "How much?"
"According to the rules, we need to close positions that are sufficient to cover the margin gap. Our total position is worth $100 million. To fill the $2.046 million gap, we need to close positions worth approximately $20.5 million."
One-fifth.
His money-making machine, worth $100 million, had one-fifth of it forcibly dismantled.
"What was the transaction price?" Yang Weibin asked, his voice surprisingly calm.
The trader called out a number: "$398.20."
It is $1.80 lower than the current market price.
Because it was a mandatory market order, the system sold his position at the worst possible price during the period of lowest liquidity.
"We are actually losing money..."
"explain!"
"Most of the unrealized gains evaporated, and this part of the position ultimately only realized a profit of $870,000."
Yang Weibin smiled.
That's really interesting.
He shorted gold, and the price of gold is falling; his direction was absolutely correct.
However, because he sold at the wrong time and in the wrong way, the millions of dollars in profits that should have belonged to him were swallowed up by the market.
"Boss? Are the remaining positions still available?"
"Keep it. Gold prices will fall further. We still have 80 million in positions, so we can still make money."
"But……"
The trader hesitated, as if he wanted to say something but then stopped.
"But what?"
“Once the exchange’s risk control system triggers a forced liquidation, the account will be classified as a high-risk customer. The next time there is a margin shortfall, even if it is hundreds of thousands of dollars, the system will immediately liquidate the position again without giving any buffer time.”
Yang Weibin closed his eyes.
I see.
This is not a one-time punishment.
He Yuxiang is truly commendable.
First, they risked their lives to lock up his cash flow.
He then used his aunt to launch a counterattack.
Finally, they used market rules to strangle him!
At 2 p.m. on January 14, the first complaint was served on Wai Bin International, a plastics factory company, demanding the freezing of the company's accounts and the recovery of HK$820,000 in outstanding payments.
At 3 p.m., a bank supervisor entered the company's finance department and began auditing all accounts.
At 4 p.m., Mr. He's men came directly to the front desk and placed an hourglass down: "Mr. Yang, we need to see the money before the sand runs out."
At 5 p.m., the US issued its second margin call notice.
Due to the change in position value after forced liquidation, an additional $450,000 needs to be replenished.
This time, Yang Weibin couldn't even come up with $150,000.
On January 16, the price of gold fell to $398.
If Yang Weibin's position were still intact, and if he hadn't been forced to liquidate, his unrealized profit should have already exceeded $10 million.
Yang Weibin looked at the stock market and gold price trends, then glanced at the bankruptcy liquidation document beside him, and burst out laughing.
Young people, so reckless and fearless!
They actually dared to disregard everything, just for revenge.
He won. (End of Chapter)
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