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

Chapter 250 Malicious Short Selling (4k chapters, one more to be released at midnight)
The New York Stock Exchange, Monday, 10:00 a.m.

The trading floor was bustling with activity, as usual, filled with the clamor and anticipation of the opening bell. Price clerks, chalk in hand, stood before the massive blackboard, ready to record price fluctuations. Brokers, clutching thick order books, weaved through the crowd, calling out their orders.

Peter Pan, a trader at Paine Weber Securities, had just finished executing his pre-market order for 1 shares of New York Central Railroad and was walking back to the company's trading desk with the transaction receipt.

Before he could even sit down and catch his breath, his assistant raised his arm and handed him another form, simply replying, "2 shares, New York Fire Insurance."

Peter Pan waved his hand, indicating his helplessness. He then picked up a new order form and strode towards the financial trading counter in the center of the trading hall.

The financial trading counters are always the busiest place on the NYSE floor, with a dense crowd of traders gathered around them, constantly holding up their order books and trying to find new trading partners. The blackboards here are larger than elsewhere, and there are two quote clerks. Right now, those two young men are shouting at the top of their lungs…

"Raise your bids! There are too many people; I can't hear you guys trading privately."

Peter Pan frowned. He actually preferred the less crowded counters, such as the manufacturing and arms counters, rather than the bustling financial counters, where there were too many people and all sorts of strange human smells caused by adrenaline.

At the trading desk, floor traders buying and selling popular stocks spontaneously formed several small circles. But today's circles were a bit strange; they all seemed to be chanting the same stock name—New York Fire Insurance.

Peter Pan clutched the order form in his hand, squeezed into a less crowded area, and heard the intense bidding and rapid transactions between buyers and sellers, as if it were a clearance sale at a grocery store.

It didn't take him long to figure out what was happening.

Surrounded by people in the crowd was a trader in overalls, frantically selling New York Fire Insurance stock. He was constantly arguing with people to confirm the latest transaction price. He had two assistants, one responsible for collecting orders; ridiculously, the other held a huge stack of order books, which, if they were all sell orders, amounted to quite a lot.

Peter Pan glanced down at his order—a market buy order for 20,000 shares of New York Fire Insurance.

Deep down, Peter Pan was very happy. Since someone was selling for a large sum, it meant that he wouldn't have to go through the trouble of finding smaller sellers and making multiple transactions.

At that moment, the trader in overalls was still shouting to the other traders, "$16! I have 1 shares of New York Fire Insurance here for $16. Anyone want them?"

He made a selling gesture, but the gesture wasn't very standard. Also, the man's accent sounded strange; he didn't sound like a native New Yorker.

From time to time, traders in the crowd would send him their buy orders, which had just been placed for 2000 shares. But the man seemed to be a "fairy godmother who grants all requests," and he would sell like crazy at that position as long as someone dared to buy.

As Peter Pan watched the clerk write the New York Fire Insurance code and the latest price on the blackboard, he was about to ask the trader in overalls to buy 2 shares of New York Fire Insurance when a cold, loud, and emotionless voice shattered the noise of the hall like a hammer blow.
"Jesse Kelton Corporation, selling 2 shares of New York fire insurance at market price!"

The voice came from an inconspicuous brokerage seat in the northwest corner. The person speaking was a tall, thin man with a stern face, wearing a well-tailored dark suit. He was the chief trader of that seat.

The tall, thin trader's voice was devoid of any hesitation or probing, carrying an absolute, unquestionable, and cold tone.

"Market price? 2 shares?" The assistant next to the trader was stunned. He subconsciously double-checked, unable to believe that his trader had suddenly sold 2 shares of New York Fire Insurance without prior notice, and at market price no less...

This will instantly shatter the current stalemate in stock price negotiations!

The assistant's question was also the question of the traders in the room. There was a brief silence as everyone wanted to hear the man confirm it again.

"Market price, all, now!" The tall, thin trader didn't even glance at him, his eyes fixed on the blackboard, repeating the instructions like icicles, leaving no room for negotiation.

The buyers who had been surrounding the overalls trader abandoned him and instead gathered around the tall, thin trader, tentatively making offers.

“At $15.75, I’ll buy 1500 shares…”

"$15.5, my price is low, but I want 3000 shares!"

……

Peter Pan wanted to squeeze forward to buy the 2 shares he had ordered, but the several eager buyers who had just gathered around the overalls had already completed their orders, instantly consuming most of the 2 shares that the tall, thin man had dumped, and the stock price was driven down to $14 and five-eighths.

Peter Pan stopped in his tracks. He had a strange feeling that the tall, thin trader wouldn't stop there; after these 2 shares were sold, he would definitely sell them again...

The overalls trader frowned. He had just sold at $16, but the man had immediately dumped the order at $14 and five-eighths, a sharp drop of 6.5%.

"Hey! Don't do this! You're crashing the market and making it impossible for everyone to participate!" the trader in overalls yelled at the man.

The tall, thin man didn't speak, but continued to frown, "Is there any more? The current price is 14 and 5/8..."

The man in overalls pushed his way through the crowd and continued yelling at him, "Didn't you hear me? Stop smashing things! We'll take turns selling them..."

The tall, thin man glanced at him and said in a deep voice, "Just as you said, the orders you just had have already made a 6.5% profit. If you're willing, sell them to me, and you can make a 6% profit right now."

The trader in overalls was taken aback by his words, paused for a few seconds, and then said, "I'll only sell when I've made 2 points."

The tall, thin man turned to look at the trading assistant in overalls and then asked, "How many shares did you sell? Can you buy them back to close the position with a 2% profit?"

The man in overalls stared intently at the tall, thin man, wondering what he was up to. He then said, "You're right, a 2% profit. I have 1.8 shares here. If you buy them at $14, I'll buy them and close my position right now."

Peter Pan raised his eyebrows when he heard this.

Naked short selling in exchange-traded markets is generally short-term and doesn't involve holding the stock for the long term, because on the T+5 settlement date, the seller needs to find stocks to settle the position. Therefore, short sellers often buy back to close their positions within 5 days and don't actually wait until the settlement date.

For a floor trader, if a stock that has just been shorted has a profit of more than 10%, then it is really time to consider closing the position on the same day!
But $14 was indeed too low a price, and Peter Pan estimated that the tall, thin man wouldn't agree. But surprisingly, the tall, thin trader readily agreed, "Sure! 1.8 shares, $14, give me all those shares."

The man in overalls paused, then asked, "Are you serious!?"

"Hurry up, if you really want to buy and close your position." The tall, thin man didn't say anything more.

The man in overalls was only slightly taken aback, then called over his assistant and handed him all 1.8 shares he had collected at over $16, instantly making $3.6. He left happily.

Before people could react, that cold voice rang out again, even louder, with a deliberate, chilling arrogance: "New York Fire Insurance, dump another 2 shares! Market price!"

Boom! The crowd erupted in chaos.

"Is he crazy? Didn't he just collect nearly 4 shares? Why is he still shorting them?"

"What happened to the fire insurance? Is there any news of a major disaster?!"

"We can't handle it! The market's current buying power simply can't absorb his selling pressure. These 2 shares will crash the market..."

There were signs of panic in the market, and floor traders who had the flexibility to buy or not decided to wait and see, which further reduced buying pressure.

However, this news was good for Peter Pan. He squeezed into the crowd, stood in front of the tall, thin man, and smiled as he made a buy gesture, "If you can lower the price by another dollar, I'll take all 1 shares!"

The tall, thin trader looked at him and said, "Okay, 2 shares of New York Fire Insurance, that's $13!"

Ignoring the crowd's doubts, Peter Pan had arrived at the counter at $16, but now he had secured the best price he could for his customer, so he didn't care what others said and simply bought 2 shares of New York Fire Insurance stock directly from the man.

The clerk at the counter wrote the latest price for New York fire insurance—$13—on the blackboard and then on wax paper, letting the stock price spread throughout the United States.

Peter Pan squeezed through the crowd and was about to leave when he heard the tall, thin man, like a tireless harbinger of doom, continue to deliver the fatal blow whenever someone came to pay the bill:
"Sell 8000 shares at market price!"

"5000 shares! Market price!"

"Another 1 shares! At market price! Sell them all!"

Each time a buy order was placed, the price of fire insurance was driven down. The prices of New York fire insurance on the blackboard were being frantically erased and rewritten, and the numbers became increasingly alarming.

Peter Pan turned to look at the man and felt that he wasn't shorting the market, but rather committing a targeted financial murder!

The short sellers behind New York Fire Insurance possess incredibly accurate intelligence and substantial capital. They seem to disregard everything else and are determined to destroy the company's stock price at all costs.
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Meanwhile, news of a New York fire insurance premium of $13 reached the New York branch of Paine Weber Securities, where King Astor IV had just watched the stock price plummet and looked puzzled.

"That's not right! Based on my calculations, this stock shouldn't be falling so sharply..."

He had just placed buy orders for 20,000 shares each when the stock price fell to $15.75 and $15, but the price continued to fall, making Astor a little uneasy. He turned to look at Larry and found him whispering with a trader. The trader took a trading order from him and turned to place the order.

"Hey! Larry, what are you doing?"

Larry was all smiles. "I bought another 10,000 shares of New York Central Railroad. The company's stock went up 5.5% in 15 minutes!"

King Astor IV knew that in stock market terminology, 5.5 points meant a price increase of $5. This might not seem like much, but the opening price of New York Central Railroad today was only $105. A $5.5 increase would be $111, which was actually quite a good increase.

Seeing that Larry was making money while he himself seemed to have suffered losses, King Astor IV was a little unhappy and hurriedly asked, "These are all... stocks with good news, so why didn't my stocks go up, but instead went down?"

Larry was taken aback and quickly looked at the price chart, only to be astonished to find that New York fire insurance had fallen to $13 and was still plummeting since the opening.

“There’s a problem, John! You can’t keep buying! Something’s not right with this stock!” Larry turned to look at Astor IV, his face serious.

"Is that so... alright!" King Astor IV asked, his face showing a mixture of doubt and a hint of defiant resentment, "Larry, what do you think?"

Larry tugged at his sleeve, and the two returned to the private room.

Seeing that no one was around, Larry lowered his voice and said, "The other party is a master! You can tell from his cold-blooded plan to blow up the Waldorf Hotel and to make a fortune in the stock market through this disaster. He must be good at this. Not only is he cold-blooded, but he is also shrewd. If he knows that his men have been defeated, and he still continues to short New York fire insurance, then there must be something wrong with him."

King Astor IV had always thought he would drive up the stock price and make the short seller pay the price, but he hadn't considered what Larry had said.

He thought for a few seconds, then turned to Larry and said, "But the stock has already fallen so much. Would it be okay if I bought another 4 shares to lower my average cost?"

Larry thought for a moment, then frowned and said, “I’m a trader, and I don’t believe in averaging down. I just think there’s something wrong with the current price. The price chart clearly shows that the path of least resistance is downwards… I suggest you abandon this idea.”

King Astor IV had his own thoughts. He saw that Larry had just bought 1 shares and already had a considerable unrealized profit, but he himself had put in 6 shares and the stock price kept falling, which made him feel very uneasy.

After thinking for a moment, he called over another trader and instructed, "Buy me 2 more shares of New York Fire Insurance!" Then, he turned to Larry and explained, "I've halved the number of shares I'm buying, is that alright?"

Larry smiled at him, neither agreeing nor disagreeing. He thought to himself that good advice was useless to that damned man, and he had already said everything; whether he listened or not was up to him.

(End of this chapter)