Reborn in America, I am a legendary short seller on Wall Street.

Chapter 156 Selling Colt, Making a Huge Profit (Part 2)

At this moment, inside the New York Stock Exchange, James Keane's personal floor trader, Mr. Quincy, with his meticulously slicked-back hair, stood lazily in front of the manufacturing and arms counters, waiting for the floor traders from different brokerages to make their bids.

The opening price of Colt was set by a trader who was eager to sell his Colt shares.

The price of $198.25 is not low, because the stock price before the trading halt was $127. The trader's previous asking price was exactly $200, but no one responded to his selling price, so it dropped directly to $198.25.

Colt does have some positive news, but with the price already at this level, even retail investors who are bullish on the stock are hesitant to buy.

After the opening price was determined, a dozen or so floor traders were briefly deadlocked. Everyone had buy or sell orders, but they all wanted to see who would place the first bid.

Quincy, with his slicked-back hair, wasn't in a hurry to make a move. He was toying with a double eagle gold coin in his hand, watching the traders in the room stare at each other while letting the coin flow between his fingers.

Just then, an elderly man in a tailcoat arrived at the counter with his three henchmen.

The name tag of an experienced trader only has two stars in the area where their name is recorded; this indicates that they hold an institutional trading seat.

"Teller, please tell me the current price, I mean Colt firearms!" The veteran trader first asked the counter's price clerk.

The clerk glanced at the wax paper. "The price that just went through is $198.25, sir. That's the only offer we have right now!"

The experienced trader glanced around, straightened up, expertly made a trading gesture, and announced loudly, "I have 10000 shares of Colt to sell, asking price $205!"

The veteran trader's offer drew snickers from the surrounding traders. After all, the first trader had asked for $200 at the opening price and no one had taken the order. Who would take his $205 Colt order now?

But before the traders could even exchange glances, Quincy, with his slicked-back hair, strode over to the veteran trader and shouted, "1 shares, right? I'll take them!"

Everyone was startled and stared intently at Quincy, whose face still wore a somewhat manic smile.

The experienced trader solemnly placed the order on Quincy's tablet, and the two quickly completed the transaction for 10000 shares of Colt. After the trade was finished, the experienced trader suddenly looked up and saw the slicked-back hairdresser still standing in front of him. He asked in surprise, "Is there anything else, sir?!"

"Stocks! I want Colt stock too!" Quincy said casually, rubbing his right hand together.

The veteran trader frowned and said, "I still have some Colt stock, but I want to wait and see how the price goes!"

"Stocks! I want Colt stock too!" Quincy continued loudly, seemingly ignoring the other person's words and talking to himself.

The veteran trader hesitated for a moment, then beckoned to his assistant and produced another trading order. "Then another 1 shares, but not $205 this time. I want $208!"

Quincy nodded without hesitation, his fingers rubbing together incessantly, like an addict waiting for the cigar to be handed to him.

The experienced trader handed over the order form, and two minutes later, another stock transaction was completed at a price of $208...

"The stock price has broken through!!" a floor trader muttered to himself.

"Who's buying Colts with such a large investment?" another trader remarked.

“He seems to be one of James Keane’s men…” someone whispered.

The person who had just asked the question nodded, secretly pulling out his trading slip from his pocket. Just as Quincy was about to ask for shares again, the trader suddenly stepped forward and loudly announced, "I have 3500 shares of Colt here. Do you want them?"

Quincy frowned and asked, "How much?"

“Also 208!” the man replied.

Quincy waved his hand, "Too few, no thanks, only 3500 shares, I find filling out transaction forms too much trouble!"

"Then how about 207.5? Do you want it?" the man quickly asked.

"207!" Quincy gestured to indicate that he was buying the stock.

Without hesitation, the man slapped the order form on Quincy's hand.

The scene was witnessed by other traders, and they were all tempted. They then took out their own trading orders, ready to sell to Quincy.

Undeterred, Quincy collected nearly 20,000 more shares, with an average transaction price of around $206.50. As a result, the first batch of scattered orders held by floor traders were sold. The sellers looked excitedly at their orders, then at Quincy, their faces showing confusion, wondering why he continued to collect Colt shares at such a high price.

The traders who had Colt buy orders were now in a panic. They were waiting for their clients to set a limit price, but the stock price had broken through the strong support level of $200 and was still going up. What should they do?
The elderly man in the tuxedo seemed oblivious to everything. He took out another list from his assistant and, just as he had done initially, continued, "Colt, $210, I want to sell 10000 shares. Anyone interested?"

Everyone was surprised again, and their eyes focused on Quincy's face.

Oblivious to the surprised looks around him, Quincy rubbed his fingers together again and shouted, "I want it!!"

One of the floor traders couldn't hold back any longer. He had a conditional market buy order in his hand, and he couldn't just watch the slick-haired guy steal his trading opportunity. So he took two steps forward, pointed his right hand at himself, and shouted, "$210, I want 2000 shares."

"Get out of my way!" Quincy glared at him and yelled. "Didn't you hear me? I'll take all 10,000 shares!"

"Then I'll offer $210.25 for 2000 shares!" The floor trader began to raise the price.

Quincy frowned and didn't follow up immediately, but the trader had already rushed to the old man in the tuxedo and started making a deal.

At this moment, the second wave of orders began to flood the market, including both sell and buy orders. But as one trader was signing for a trade order, his colleague whispered something in his ear.

"...Have you heard? Mr. Keane is also acquiring Remington stock! Colt will definitely receive further investment, otherwise why would Mr. Keane continue to buy Remington shares in large quantities while also acquiring Colt shares?"

Upon hearing this news, the trader paused for a moment, then immediately pulled out his buy order and shouted, "3200 shares of Colt, I want to buy. Was your previous quote $210.25?"

The elderly man in the tuxedo frowned, spread his hands, and said, "Sold. It was just sold to this gentleman for $211.5..." He was referring to Quincy.

At this moment, someone with a sell order started making an offer: "My price is $211.5, I want 1500 shares!"

"I want 400 shares, at the current price!"

As the arms section became increasingly popular, news of Mr. Keane's acquisition of Remington stock spread among the traders near the counter. Even those floor traders who had originally intended to make some trades for themselves decided to take advantage of the situation – since Colt was experiencing a short-term surge today, they might as well buy in and profit from the price difference…

"I want 200 shares of Colt!"

"I want 500 shares!"

……

Unfortunately, Peter Pan, the trader from Paine Weber Securities, was not present at the time, because he could tell at a glance that the old trader in the tuxedo was actually one of Mr. Morgan's men;
It was also a pity that Elliott, the floor trader at Reading, wasn't present. Otherwise, he would have immediately recognized that Quincy with the slicked-back hair was Mr. Keane's man, and the old trader was Mr. Morgan's trader...

They're engaging in "wash trading," meaning people from the same group are actually buying and selling stocks among themselves to artificially inflate the price...

Besides sending Quincy here to trade against Mr. Morgan's men, Mr. Keane was also buying Remington stock at any cost!

In fact, Mr. Keane had secretly acquired a significant amount of Remington's stock a week earlier. Remington is a small-cap stock, and its shares are not traded frequently on normal trading days. At this moment, Mr. Keane simply used two buy orders of 1 shares each to double Remington's stock price!
The last quoted price for Remington was $64, but only 500 shares were traded. Mr. Keane's floor trader still had 9000 shares unsold, but there were simply no more sell orders for Remington on the floor...

Remington's frenzied surge had made it clear to retail investors and some large funds who had been watching Colt closely what was going on. Coupled with the large-scale buying of Colt, they immediately took action, and large, current-price Colt stock orders flooded the market like snowflakes...

Colt's stock trading not only became more frequent, but the stock price also began to rise continuously...

$215, $224, $237...

Intense bidding caused the stock price to rise, and a flood of orders from outside the trading floor urged floor traders to immediately buy existing Colt stock at market price...

The few sell orders were instantly swallowed up by fierce buying, because the old man in the tuxedo had regular, large Colt sell orders, so those eager to get Colt stock unconsciously targeted the old man for stock accumulation...

At this moment, no one noticed that Mr. Quincy, who had just seemed to be buying Colts recklessly and at any cost, had quietly stopped buying...
.
Meanwhile, Larry sat in front of Reading's sales office, watching Colt's stock price rise steadily as he had expected. Larry remained silent, but inwardly he was very optimistic about this surge.

Because the stock price opened below $200, it didn't drop at all and immediately started to rise. It seems that the insiders manipulating the market didn't give sellers a chance to dump their shares before driving up the price.

Larry mentally simulated what price he would buy at if he were the trader...

After several rounds of calculations, Larry frowned, feeling that the stock price was rising faster and faster, as if the major shareholders were not putting much effort into raising the stock price.

Larry was a little confused, but then he heard Remington's offer price at $64, and several offers were at $64. He immediately realized that there were no more sell orders for Remington's stock, and the stock price was hanging at a high level!
Larry turned to his trader and asked, "Could you please check Remington's stock price yesterday?"

A short while later, the trader replied, "Yesterday's closing price was $31.5, and today's opening price was the same, but the stock rose more than 30 points during the day!"

Larry's eyes lit up, and he turned to look at the price list, instantly understanding James Keane's plan:
"This is a feint! Using small-cap stocks with related scandals to drive up the price of this stock, causing profit-takers to stop selling due to greed for further price increases, and causing buyers to change their expected market price due to fear of not getting the stock... What a brilliant move!"

Seeing that Colt's latest price had climbed above $230, Larry had an idea. He immediately took the trading order, picked up a pen, and wrote down an order to sell 5000 Colt shares at market price. He held the order in his hand, waiting for the stock price to climb to a suitable level before selling.

He then took another order form, filled in the remaining 1500 Colt shares as "Sell 1500 Colt shares at limit price of $290", and then handed the second order form to the trader.

The trader glanced at Larry's order and verified it, saying, "Are you going to sell 1500 shares of Colt at a price of $290?!"

Larry nodded and replied, "Yes, please place your order now!"

The traders rushed to the telephone exchange and began making calls to the New York floor trading seats...

Soon after, Elliott, a floor trader at Reading, wiped the sweat from his brow and headed straight for the trading counter with his order form.

Upon arriving, Elliott was surprised to find that the elderly man in the tuxedo who had been relentlessly buying Colt shares before the last trading day was now distributing them. Elliott knew then that Colt's recent stock price surge had likely come to an end, since even the biggest player was starting to sell…

But Elliott could only say these words himself; he dared not say a word more. After all, delaying other people's transactions in the arena was a very impolite thing to do and would offend people he shouldn't have!
Elliott stood there for 30 seconds and knew the current price: Colt's stock price had climbed above $250...

Elliott glanced at his limit order, where Colt's sell order was as high as $290, so he didn't rush and silently waited to watch the show.

Meanwhile, Peter Pan, a floor trader at Paine Weber Securities, arrived and quickly sold 1500 shares of Colt stock at $254.

Eliot wanted to greet him, but Peter Pan was clearly busy and hurried away...

After another 15 minutes, Colt's stock price finally climbed to $289.

Elliott pushed his way through the crowd, gesturing vigorously and shouting, "$290! I have 1500 shares left! Anyone want them?"

By this time, the price had climbed to its limit, and the buy orders were getting smaller and smaller. The buy orders chasing the high price were barely enough to absorb the 10000 shares of the old man in the tuxedo. When it came to Elliott's 1500 shares of Colt at $290, it took three people's buy orders to absorb those 1500 shares...

Larry, sitting at Reading, kept staring at his $290 limit order. Although he wasn't sure if all the orders shown on the quote board that were executed at $290 were his, it was clear that the stock price's upward trend had begun to slow down.

Ten minutes ago, when the stock price rose above $280, buy and sell orders at the same price level appeared frequently. This meant that it might take several buy orders to absorb the sell orders at a particular price level. This phenomenon was quite different from the previous situation where buy and sell orders were absorbed very smoothly, with each price level offering one order at a time.

Larry knew in his heart that the stock price had reached its limit.

The fact that it took three separate attempts at the same price of $290 to buy up 1500 shares, which I had set myself, speaks volumes!
There's no need to hesitate any longer! The results of the trial order have already spoken for themselves.

“Trader!” Larry turned to the trader, then held up the trading order in his hand. “Please press this to place your order now!”

The trader took the order and checked it, saying, "You mean the market price, to sell all 5000 shares of Colt?"

"That's right!"

Upon hearing Larry's confirmation, the trader rushed to the phone and called the floor trading desk...
.
Elliott had just completed a transaction of 1500 shares and filled out the order. Before he could even return to his counter, a colleague had already submitted another sell order.

Elliott saw that this time it was market price, so he sold 5000 shares of Colt!

A lot of shares were sold, and at market price, which means the client was in a hurry to sell.

Elliott raised his eyebrows, walked a few steps to the manufacturing and arms counter, and asked, "Does anyone else want Colt?"

Just then, the elderly man in the tuxedo offered $300. A trader was thinking of buying Colt's stock from him, but when he heard Elliott's question, he stopped and asked, "What's your price?"

“I’ll give you the market price, you give me the transaction price!” Elliott replied.

The group rolled their eyes, thinking, "Why bother buying $300 from the old man?" So they offered $298 and took the 5000 shares of Colt from Elliott.

It's finally over!
Elliott breathed a sigh of relief, filled out the transaction form, glanced at the elderly man in a tuxedo still waiting for a buyer at $300, and then turned and walked back to the Reading Company's counter.
.
Ten minutes later, Larry received his first transaction confirmation.

Of these, 1500 shares were traded at $290.

这里有500股的成本价是26.5美元，获利13万1750美元；1000股的成本为116.5美元，获利17万3500美元。

The profit from the first 1500 shares totaled $305,250!

A good start!
Ten minutes later, Larry received his second transaction confirmation.

Looking at the price of $298, Larry raised an eyebrow, feeling that the price was higher than he had expected.

Larry looked up at Colt's latest price quote. The stock price hit a high of $300 but failed to break through, instead turning downwards. It seemed that the major shareholders were starting to sell off their last remaining shares...

第二笔5000股，每股盈利181.5美元，5000股一共盈利90万7500美元。

Colt sold a total of 6500 shares, making a total profit of 1,212,750 yuan.

Even though he had mentally prepared himself to make a fortune, Larry was still taken aback when he calculated the number. A voice kept asking himself...
"Am I already a millionaire? Did I really make $120 million in one go??"

A surge of overwhelming joy, a feeling he had long anticipated about becoming incredibly wealthy, welled up inside Larry, leaving his eyes vacant and sweat pouring from every pore of his body…

120 million! 120 million!
That's $120 million!!
Wait, there are other figures to check: for the first order, Reading will charge me $4350 in commission at the original commission rate of 1%; while for the second order of 5000 shares, they will charge me $14900 in commission.

They charged me a total of 19250 in commissions!! Holy crap, that's outrageous!
Fortunately, there was a commission rebate. After deducting the 3.5% regulatory fee, Reading still gave me a commission rebate of $12512.

Oh, right! I almost forgot, the initial margin for this account was $15.99.

也就是说，自己账户真正剩余的资金应该是15.99万美元加上121万2750美元，再减去19250美元，等于135万3400美元！！
Then they still have to give me a commission rebate of $12512!
Damn, that means I now have $135 million in margin in my account, and I can have an extra $1.2 in cash on hand?

Larry outwardly feigned calm, but his nervous toes were digging into the floor in his shoes...

Twenty minutes later, it was noon on Saturday. Customers were already leaving the Reading branch, and the front desk manager, Baruch, was saying goodbye to each of them.

After the branch office was empty, Larry walked up to the front desk manager, looked around to make sure no one was watching, and whispered, "...transfer $100 million to my bank account!"

Baruch nodded and murmured, "Okay, you're transferring out 100 million..."

Suddenly, his eyes widened as he stared at Larry in disbelief, a look of utter horror on his face as if he had seen a demon. He unconsciously raised his voice and asked, "You...you mean...transfer...one million?"

Baruch finally realized something was wrong, and his voice grew softer and softer as he spoke...

Larry nodded, then said somewhat uncertainly, "...Yes, one million dollars!"

(End of this chapter)