I'm in the county town, and you say I'm a big shot?

Chapter 564 Inviting Fang Qingye to Come Out of the Mountain
Villas near Guangmao in Shanghai.

The four people sitting in the living room—Lin Guangmao, Fu Haitang, Ye Qingjun, and Zhu Yi—all looked rather grim.

How could it be good-looking?
The four accounts are about to be liquidated!

The story begins two months ago.

The three of them, Lin Guangmao, Fu Haitang, and Ye Qingjun, had their eyes on methanol futures on the Zhengzhou Commodity Exchange and were preparing to short it. Worried that they didn't have enough resources, they also brought Zhu Yi along.

Their reason for shorting methanol is simple:
Methanol prices began to rise in July, and by early November, they had increased from 2700 yuan/ton to 3500 yuan/ton, a rise of 30%.

Based on this, they concluded that methanol prices should have peaked and started to fall.

Another reason supporting their judgment is that crude oil futures prices have also begun to fall!
In the futures market, methanol and crude oil prices exhibit a high positive correlation. This correlation means that investors should closely monitor crude oil futures trends while also paying attention to methanol futures.

Based on this judgment, many people shorted the main methanol contract M1403.

The closing date was mid-March 2014.

Having learned from their previous experiences with the speculation in Zhengzhou cotton and soybean meal, the group proceeded with more conservative trading this time, refraining from illegally opening multiple accounts for wash trading. However, to their utter surprise, the price of the M1403 contract not only didn't fall, but continued to rise!
Seeing the divergence between methanol futures prices and crude oil futures prices, based on their years of experience in the futures market, they immediately realized that someone was manipulating the market to deliberately squeeze short positions!

Of course, these people were not to be underestimated, and they immediately increased their investment. However, the contract price did not decline unilaterally; it simply continued to rise after a few days of sideways trading.
What shocked them even more was that the price of methanol in the spot market also began to rise!
Only then did they realize that they had encountered a formidable opponent.

Someone is going long in both the spot and futures markets simultaneously!
It was already mid-December, and seeing that methanol prices were not only not falling but were slowly rising, the group became anxious. So they gathered at Lin Guangmao's villa to discuss countermeasures.

"Guangmao, have you found out who's behind this bullish move?" Ye Qingjun asked, his brows furrowed.

Lin Guangmao, puffing on his cigar, slowly said, "We found it. Chengdu Xinhua Chemical Materials Co., Ltd., and the person in charge is their general manager, Jiang Wei. Xinhua Chemical is the largest methanol trader in China. It is said that his company accounts for 30% of the national methanol trade."

Everyone gasped upon hearing this.

This time we've met our match!

"Moreover, it is rumored that Jiang Wei has signed agreements with several domestic companies, with his Xinhua Chemical providing the funding to entrust these companies to go long on the futures market with him, thus circumventing regulation. Of course, this is just a rumor, and its truth is unknown."

Hearing Lin Guangmao's words, Fu Haitang smiled and said, "Then it's probably pretty close to the truth."

"The problem now is, what should we do? Close out our positions or continue shorting?" Zhu Yi asked, her brows furrowed as she spoke, seemingly oblivious to the smoke filling the living room with the smoke from the three men.

"I've already invested 3 million yuan, and I don't have much money left."

"I don't have much left either. I invested 7 million." It was Ye Qingjun who spoke. He took a sip of tea and said with a smile, "We can't put all our savings on the line, can we? You're all still young; even if you lose, you'll have a chance to recover. But what about me? I'm getting old; I can't afford to take that kind of risk."

Ye Qingjun's attitude was very clear.

That's all I'll invest. If I really can't hold on any longer, I'll be prepared for forced liquidation.

I'll just accept my fate this time.

Lin Guangmao felt a little disdainful, but he was helpless. The group was actually a loose alliance, just a verbal agreement. Ye Qingjun was no longer involved, and there was nothing he could do.

So he looked at Fu Haitang and asked, "Haitang, what about you?"

"Me?" Fu Haitang: "I do hope to increase investment and crush that guy surnamed Jiang, but I reckon that even if we increase investment, we probably still can't handle him. Don't forget one thing."

Fu Haitang, contrary to his usual somewhat nonchalant demeanor, became serious: "Jiang Wei's company's influence in the spot market: 30% of the country's methanol transactions are handled by him! Such a person, to some extent, controls the pricing power of methanol in the spot market. Tell me, how do we fight against him?!"

Everyone fell silent once again.

After a moment, Lin Guangmao couldn't help but speak up: "Are we just going to accept this? I refuse to accept it!" If he were to force liquidation now, a rough estimate would be a loss of nearly 6 million!

6 million.
Last year, he violated regulations by trading soybean meal futures and was investigated by the China Securities Regulatory Commission. Not only was all the income from trading soybean meal futures confiscated, but he was also fined 5 million yuan!

This severely damaged his health, and he didn't touch futures for over a year. This time, he finally chose methanol, hoping to recover some of his losses, but he ran into a tough opponent again!
If we lose another 6 million, it'll be the end of us.

Ye Qingjun, who was standing nearby, sneered: "What can you do if you're not convinced? Are you going to move a rock and smash the sky?!"

Who told you to be so heartless as to invest 9 million at once!

Ye Qingjun did not say the last sentence aloud.

That's too hurtful.

Among them, Linguangmao Investment has the largest amount of investment.

"Why don't we go find Fang Qingye? See if he has any ideas? Or ask him to invest? He's very wealthy," Zhu Yi suddenly suggested.

Fang Qingye?
Since speculating on Shanghai copper two years ago, Fang Qingye has never ventured into the domestic stock and futures markets again. It is said that he is doing very well in the overseas securities market.

Should we go find them now?

The other three looked at each other without saying a word.

Zhu Yi understood.

Actually, they couldn't wait to invite Fang Qingye.

It's worth noting that Fang Qingye hasn't made many moves in the domestic securities market, but he has never lost!

They always made a fortune.

The problem is that Fang Qingye's attitude towards them is rather cold.

Although they had collaborated several times, Fang Qingye did not seem to consider them friends.

What if they refuse if I ask them without asking?
It's so hurtful to my self-esteem.

"I think Fang Qingye is a very good person." Zhu Yi continued, "Last year when you were trading soybean meal futures, if it weren't for Fang Qingye's timely reminder, you would have only lost money, and you might have ended up like Tian Hao and Yan Qingliang."

The expressions on everyone's faces immediately turned grim.

The Tian Hao and Yan Qingliang mentioned by Zhu Yi were originally the general managers of Yong'an Futures and Guotou Futures. They were arrested and imprisoned for allegedly manipulating market prices during the speculation of soybean meal futures, causing serious losses to investors, leading to the explosion, and seriously affecting social stability.

Thanks to Fang Qingye's reminder, they stopped in time. Although they were fined, it's better than losing money and going to jail, right?

“Okay, let’s go find him! Let’s beg him!” Rin Guangmao decided.

What's more important than money than face?
“I don’t think it’s enough for just the few of us to go find him,” Zhu Yi said. “We need to bring someone else along.”

"Who?"

"Shi Guangrong."

(End of this chapter)