Starting with a fully invested A-share portfolio to become a capital...

Chapter 58 Leverage Maximized
The next day, early in the morning.

Last night's light rain left dewdrops on the leaves of the trees outside the dormitory building, reflecting dappled sunlight in the morning light.

"Buzz-"

The Nokia phone placed on the table below vibrated twice. Since the bed and table are integrated, Zhang Yang, who was sleeping on the upper bed, could clearly feel the vibration.

Knowing he had important things to do today, Zhang Yang didn't stay in bed. He rarely stayed in bed unless he was too tired.

After a brief moment of contemplation, he got up and climbed down the stairs.

Zhang Yang went to the lower bunk table and picked up his phone to check messages.

He originally thought it was Tao Yuang sending him a message, but it turned out to be a payment notification.

[尊敬的客户，您尾号2389的建行账户于2009年4月23号8点12分收到华国币40000元（大写：肆万元整）转账汇款，可用余额，40024元，备注：《华信证券模拟盘大赛》替操盘的劳务费用。]
"Lai Weijie is actually quite trustworthy," Zhang Yang muttered to himself as he looked at the bank's confirmation SMS.

With the 4 yuan in receivables received and the money in his securities account, his total funds have now reached 23 yuan.

It's worth mentioning that because I purchased a one-day reverse repurchase agreement for treasury bonds yesterday, the 8.8 yuan of idle funds in my securities account cannot be withdrawn immediately. I will have to wait until tomorrow, Friday, to transfer it out of my bank card.

As for the 10 yuan invested in ST Zhongfangji, Yangtze Power, and Huaguo Shenhua, they can be sold and transferred out of the bank at any time.

Out of politeness, Zhang Yang sent Lai Weijie a QQ message to indicate that the money had been received.

He then turned off his phone, went to the balcony to wash up, and then went to the cafeteria for breakfast.

Zhang Yang didn't bring his laptop this time because Tao Yuang said he would pick him up in the morning, and if nothing unexpected happened, he should come over after clocking in at Huaxin Securities.

……

Sure enough, around nine o'clock, Zhang Yang's cell phone rang.

He didn't answer the phone right away. Instead, he walked out of the dormitory, closed the door, and then pressed the answer button: "Hello, has Senior Brother Tao arrived yet?"

"I'm downstairs in your dorm building. You'll see me when you come down."

"almost there."

Zhang Yang quickened his pace.

It didn't take long to get from the third floor to the first floor. Before long, Zhang Yang walked out of the dormitory building and saw Tao Yuang's silver-white BMW M3 sports car.

Reaching the passenger seat, Zhang Yang skillfully opened the door, got in, and fastened his seatbelt, saying, "I'll have to trouble Senior Brother Tao this time."

"Don't be so polite, we're all brothers."

Tao Yuang smiled.

If it were someone else, he might have made the trip for personal gain, but Zhang Yang wanted to save the other person's life.

After all, there are all sorts of margin trading companies nowadays, and their tricks are dazzling. If you are not careful and fall into a trap, your principal will be taken away and run away.

After the BMW M3 made a U-turn, Tao Yuang lightly pressed the accelerator and slowly drove away from the student dormitory area.

After leaving Shanghai University of Finance and Economics, this performance beast unleashed its original speed, extreme acceleration, and razor-sharp appearance, attracting the attention of many passersby.

Among the BBA brands, BMW is undoubtedly the most eye-catching and attractive to young people, with the M series being an unattainable "goddess" in the hearts of many men.

“I consulted with them for you last night. The current annual interest rate for margin financing is generally around 20%, which is no different from taking out a loan at a high interest rate. I have some connections with a business manager at Hongyue Investment. He said on the phone that he could lower the interest rate to 12%. You should think it over carefully,” Tao Yuang reminded him again.

Based on an annual interest rate of 12%, if Zhang Yang wants to borrow 80 yuan to reach 100 million yuan, which is a 5x leverage, he would have to pay 12% annual interest on the borrowed 80 yuan, which is 0.0329% per day, totaling 263.01 yuan.

This means that if leverage is applied at five times, regardless of whether Zhang Yang makes any trades, he will need to pay 263.01 yuan to the margin trading company every day.

Can I get a discount on non-trading days?

Zhang Yang inquired.

His statement also indicated his stance: to continue increasing leverage.

“I’ve heard of daily margin financing. I’ll ask about it for you when we get there,” Tao Yuang said, looking ahead at the road.

……

Hangzhou, Jianggan District.

Two buildings in Qianjiang International Times Square.

This nine-story office building was built by Hongyue Real Estate Development Co., Ltd. The bottom eight floors are all rented out, while only the ninth floor is reserved for its own financing company.

The behind-the-scenes boss of Hongyue Investment is Liu Hua, who initially made his fortune in real estate and later expanded into mining and hotel businesses.

As the stock market bottomed out in October 2008, the demand for margin financing increased significantly. Some margin financing company owners who had been "squeezed dry" approached Liu Hua, wanting to borrow money from him to lend to clients who needed leveraged financing.

Who is Liu Hua?

He is the executive chairman of the Qingyuan Chamber of Commerce. His business acumen and keen sense for money immediately made him realize that he could run a market financing business on his own.

In just six months, Hongyue Investment became the "leader" of margin trading companies in the Yangtze River Delta region, and its business scope expanded westward, even opening offices in southern Yunnan.

Around noon, just after speaking with Tao Yuang on the phone, Zhang Xiaolong, the business manager of Hongyue Investment, was already waiting for him in the building's elevator corridor.

"Ding--"

The two elevator doors opened.

"Senior Brother Tao, how have you been?" Zhang Xiaolong greeted him warmly.

"It's almost noon, I hope I didn't disturb Xiaolong's lunch?" Tao Yuang said with a smile.

On the surface, the two seem to have a good relationship, but only they know in their hearts that it's all just an act.

"No, no, is this the brother who needs financing?" Zhang Xiaolong looked at Zhang Yang.

“Yes, I’m also from Shanghai University of Finance and Economics. Give me an alumni price, just to give me face,” Tao Yuang answered first.

Zhang Yang extended his hand and feigned surprise, saying, "You're actually a senior? My name is Zhang Yang, and I entered the class of 05."

“I’m four years older than you, I graduated in 2001, my name is Zhang Xiaolong, you can call me Brother Zhang, Brother Long or Manager Zhang, it’s fine.” Zhang Xiaolong said, shaking hands.

He then extended an invitation: "Since we're all alumni, we're family. Let's talk in my office first."

"Walk."

"Please lead the way."

The three moved to Zhang Xiaolong's office.

The office is small, about 20 square meters. Although the space is small, it has everything you need, and you can also look down at the crowd in the square below through the window.

The other party was very skilled in his work. He took out a pen and paper and asked, "Junior Brother Zhang, how much principal do you have? How much leverage do you need?"

What is the maximum leverage?

Zhang Yang asked rhetorically.

This question completely baffled Tao Yuang and Zhang Xiaolong; it was the first time they had ever heard someone ask such a question.

Is it confidence?
Or do you want to take a gamble?
Zhang Xiaolong is quite knowledgeable; he has seen too many people who want to gamble with high leverage, or rather, gamblers.

He quickly regained his composure, glanced at Tao Yuang, then looked at Zhang Yang and said, "We need to provide the highest leverage ratio based on your principal. I wonder what your principal is, Junior Brother Zhang..."

"20."

Zhang Yang replied without hesitation.

"With 20, we can only provide you with a maximum leverage of 5 times. That is, with your 20 as margin, we will provide you with 80, for a total of 100 million for you to operate."

Just as Zhang Xiaolong finished speaking, he added, "Also, I must remind you, Junior Brother Zhang, once the initial investment of 20 yuan is reduced to 95%, we may have to force liquidation."

"understandable."

Zhang Yang nodded.

Seeing Zhang Yang's proficiency, Zhang Xiaolong assumed he had done his homework and continued, "So, what leverage do you want? If you're a beginner, I suggest..."

"Full capacity."

Zhang Yang interrupted calmly.

"!!!"

"!!!"

Tao Yuang and Zhang Xiaolong were stunned on the spot.

Max it out right away?
Was it really necessary to be so reckless?!
Zhang Xiaolong looked at Tao Yuang, his eyes seeming to ask: Is this kid planning to take a gamble and become an aerial acrobat if he loses?

Tao Yuang was completely bewildered. He had considered increasing the speed by two times, three times, but he never imagined increasing it by five times.

Using 200,000 yuan with a 5x leveraged investment would incur several hundred yuan in fixed expenses per day, even at the lowest interest rate.

"This is bad. Could Zhang Yang be going through a breakup season and feeling down?" Tao Yuang couldn't help but wonder.

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It seems we're not far from the top ten on the overall charts. Dear readers with monthly tickets, this humble author is begging for yours! Thank you so much!

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(End of this chapter)