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

Chapter 270 Northwest Shanxi is in complete chaos (5K)

Just as General Electric's stock price was plummeting, Larry stood on the second floor of Paine Weber Securities' New York office, his face grave.

General Electric's stock price has plummeted, as can be seen on the price charts.

But Larry wasn't sure whether this was Mr. Morgan's arrangement or an attack launched by those who were actually shorting the stock.

Larry held the latest transaction report in his hand.

This was his first sell order of the day, and his third since Wednesday, for 1 shares. The final transaction price was $88 3/4.

My assessment was correct. Logically, Mr. Morgan should also be anticipating negative news!

To Larry's surprise, the speed and magnitude of the stock price collapse exceeded his expectations, and the decline seemed endless.

Larry was having a hard time making a decision. The gold coins that he usually held in his hand were now tightly clutched in his palm.

Larry only realized his palms were sweaty after the gold coin was completely soaked with his sweat.

Larry was puzzled—even if Mr. Morgan put on a great show! Even if some people on Wall Street could sell as soon as they received the news!

The stock price shouldn't have been driven down to this level.

At this point, Larry even began to suspect that this unusual drop was not a market decline following the release of negative news, but rather a conspiracy orchestrated by short sellers behind the scenes...

After all, no one can rule out this possibility.

Who can guarantee that the short sellers will continue to short the market indefinitely? What if they have some other tricks up their sleeves? Should I close my 3-share short position in General Electric, or not?
This is something I can't think about too much, especially after something beyond my comprehension has happened... Larry felt very nervous.

I haven't felt this sweaty feeling on my forehead in a long time!

An unknown fear was putting Larry under immense pressure. The last time he felt this way—"even though I'm making money, I'm still very nervous"—was when he was at the betting shop in Hartford…

Meanwhile, on the floor of the New York Stock Exchange.

Van der Lipp's face was also very serious.

He has already heard his assistant's report. Currently, GE's decline has exceeded his expectations.

Suddenly, a bunch of random short orders appeared out of nowhere. It was as if the entire United States was shorting General Electric's stock!
According to the original plan, this was something I was supposed to do myself.

Therefore, Van der Lip has already bought 5 long shares, ready to dump them at any time.

But now, before I can even dump the shares, the stock price has already collapsed.

This isn't a good thing! Because I still have a lot of long positions in my portfolio...

If I had simply followed Mr. Stillman's advice and shorted the stock when it was high, without resorting to these other tricks, I would certainly have been happy when GE's stock price collapsed!

The problem now is that the original intention was to prop up the stock price and then sell it off, so that the short-selling forces could be amplified.

Unexpectedly, the stock price then slipped out of his control and began to fall ahead of schedule!

Van der Lip had obtained special permission from the bank to purchase these tens of thousands of shares.

If these stocks were to become stuck in my hands, I'd be in real trouble.

Van der Lipp sat there, his face ashen, deep in thought for a long time. Finally, he abruptly stood up and said to his assistant and the other two trading assistants,
"Come on, let's go outside and have a look!"

The two assistants, seeing his expression, dared not say anything.

The third person said timidly, "Sir, aren't we going to wait for the signal? Didn't we agree that we'd get a message at 11:30 and then dump the shares together?"

Van der Lipp cursed, "It's fucking dropped like this, the news must have been leaked a long time ago! These damn idiots, they didn't even warn me before dumping the shares..."

With that, Van der Lip pushed open the door to the agency's office and strode out.

And it was at this moment...

Quincy, the slick-haired guy who had just received James Keane's order to close his position, also rushed to the middle counter.

He held two orders in his hand, one for 10,000 shares and the other for 15,000 shares. These were the short positions Keane had established over the past few days.

In addition, he had also shorted 2000 shares himself. The order form was still tucked into his shirt pocket.

Quincy was utterly bewildered when he received Keane's buy-and-close order. Keane's usual practice was to aggressively buy stocks that had experienced a price crash!
But what about today? General Electric's stock price just plummeted, and he's about to buy back and close his position.

Did Keane see some dangerous sign?

Quincy didn't care what Keane saw... What troubled him now was what to do with his 2000-share position.

Logically speaking, I should have already sold it, since I had indeed made a considerable profit.

Quincy was still a little reluctant; he felt the stock should have fallen even more!

As he strolled slowly toward the central counter, he ran into Van der Lip, who was wearing a blue coat, and his assistants.

They both looked at each other simultaneously! A barely perceptible hint of surprise flickered in their eyes…

Van der Lip frowned and asked, "Quincy, what are you doing here?"

"What the hell is it to you?" Quincy's face was full of disdain. Then, he saw the assistant behind Vanderlip—it was him, the one who had been posing as Morgan in the market to collect chips!
Quincy glanced at his assistant, then at Vanderlip, a mocking smile on his face and barely suppressed contempt in his eyes.
"What a damn rat! Impersonating Morgan's people to buy stocks and prop up the price so it wouldn't fall. I bet you were planning to dump the shares after you'd accumulated enough!" Quincy's face was full of cold contempt.

Across from him, Van der Lipp frowned and said curtly, "None of your business! Mind your own business!"

Two hot-tempered guys got together and started trash-talking each other...

Quincy, in particular, is more like a hyena that preys on others than Van der Lip's arrogance and rudeness. His favorite pastimes are arguing and relentlessly pursuing people…

Van der Lip didn't have time to listen to his rambling!

He glanced at the sea of ​​traders at the central counter, then turned to his assistant and said, "Don't you fucking stand there, come with me and sell your stocks right now!"

Quincy was gloating when he suddenly heard the other party say they were going to smash General Electric's stock. After a while, a smile appeared on his face.

Watching Vanderlip's departing figure, he squeezed the commission form in his pocket.

Right now, the counters are full of people selling stocks, and my 2+ shares are a hot commodity in their eyes!

Back to Paine Weber Securities.

At that moment, Larry was anxious and at a loss. He subconsciously looked up and around. Suddenly, he saw Mr. Porter talking to a client.

Larry's eyes lit up, and he jumped up and ran to Mr. Porter's side. After Mr. Porter finished his meeting with the client, he pulled the latter aside and whispered about the recent collapse in General Electric's stock price…

"Sir, do you think this kind of decline is normal? Continuous and non-stop decline—I mean, even if there are negative factors, even if there are some speculative investors in the market, they shouldn't be driving the stock price down this low in such a short time!"

Larry voiced his confusion. But to his surprise, Mr. Porter simply chuckled and said, "Oh, Larry, your biggest weakness is your lack of experience. In your short career, you lack experience as a floor trader!"

“Oh! What do you mean?” Larry was taken aback, knowing that Mr. Porter meant he could handle the situation. Mr. Porter’s eyes were smiling, but his face had become serious. He continued, “If the negative news breaks out suddenly, and everyone thinks the stock market is going to fall… then the vast majority of the orders pouring into the trading floor from all directions will be market orders! Because people are afraid they won’t be able to get their orders filled.”

Such continuous market-price transactions will create unnecessary downward pressure on the stock price. This is a stampede of concentrated selling, or a tidal wave of impact on costs.

Mr. Porter had only explained half of it when Larry's eyes lit up. He understood why he had been panicking yet at a loss.

As Mr. Porter said, his biggest problem was that he hadn't done all those positions on Wall Street.

Therefore, although I have unique insights into the rise and fall of stocks, I do not understand many of the details that only insiders know!

Mr. Porter had worked as a trader. In his experience, if a sudden piece of news causes a stock to rise or fall, then the flood of orders at that time will all be market orders.
At the same time, because there are limited opposing positions, such orders often drive the price to a level that even the order itself didn't expect—either high or low!

Many investors may have originally planned to short at $80, but then reverse their position and go long at $60.

However, their short positions, initially priced at $80, were actually executed at a price that was likely $60!
This was already the price at which they wanted to reverse their position and go long!
Once the market price starts to rebound, their short-selling cost of $60 will easily rise, causing them to be squeezed out by the bulls!

This is the huge variable caused by a large number of market orders in the same direction!
In short-term trading, which involves chasing highs and selling lows, the easiest and most dangerous thing to encounter is blindly dumping shares, which can lead you to short at the lowest point of the current short-term decline!

If the stock price rebounds even slightly, short sellers at market price are likely to get trapped.

However, this matter has nothing to do with me.

Having figured this out, Larry smiled. "I'm so grateful to you, Mr. Potter. I would never have thought of this without your guidance."

Mr. Potter gave him a meaningful look. "If—and I mean if—you're involved in a scheme with some big shots, remember this: never get yourself involved..."

Larry stiffened and quickly nodded, "I understand, sir!"

Mr. Potter nodded, then casually walked back to his office.

Knowing that the stock price drop had nothing to do with him, Larry's face relaxed again. He walked back to his VIP seat on the second floor, sat down comfortably, and looked at the price chart again.

General Electric's stock price there has officially fallen below $70 and is fluctuating around $68.

It seems that many short sellers who bought above $80 have started to take profits. People are buying long below $70, and this liquidation force has provided enough buy orders to temporarily hold back the stock price from further price increases.

Of course, as Mr. Porter just mentioned, there were also many short sellers who were expecting a drop to $80. Their orders have just been filled, and the execution price is already below $70!
As a result, after the stock price fell below $70, a brief equilibrium zone between buyers and sellers emerged in the market.

This is the classic moment when the bulls and bears just brush past each other and call each other idiots!
Just then, a young waiter rushed over.

He stood behind Larry and asked timidly, “Sir, are you Mr. Livingston? I’m new here and I apologize for not recognizing you… but a man named Henry Goldman would like to visit you.”

Larry turned around and instructed, "I can't go downstairs to get him, so have him come up!"

A little curious, Larry wondered, "How did Henry Goldman end up all the way here?"

Soon after, Henry Goldman, dressed smartly and stylishly, came up to the second floor and waved to Larry from afar.

The two are now very familiar with each other.

Henry Goldman took this opportunity to change his handshake into a hug, embracing him warmly as if they were old friends who hadn't seen each other for ten years.

"Oh, Larry! It's been so long, I've missed you so much!" Henry Goldman said, hugging Larry tightly as if they were best friends who hadn't seen each other for over a decade, patting Larry's shoulders repeatedly.

Then Gao Man whispered, "I've already found out what you asked me to find out..."

Larry quickly pulled away from his embrace. But he lowered his voice and asked, "What's going on? Who's shorting General Electric?"

Henry Goldman looked around before mysteriously saying to Larry, "I don't know who it is! But they must have very close ties with the people at National City Bank in New York. Because those shorted stocks all went through their accounts."

I think those shorting the stock can also use funds from National City Bank of New York to operate. So, you'd better be careful! This proves they have very substantial capital.

Larry nodded silently after hearing his news. He then turned and quietly led Henry Goldman to their seats. "Please sit down, Henry!"

After speaking, Larry sat down first, then gestured for Goldman to sit next to him.

As soon as Goman sat down with a smile, Larry suddenly turned to him and asked, "When did you find out about this?"

“Yesterday…” Henry Goldman blurted out, but he immediately realized his slip of the tongue and turned to Larry solemnly, “But this matter is of great importance! I had to check the sources to be sure. Now, thank God… I have the definite information, so I came to see you right away.”

“Yes, thank you very much.” Larry nodded emphatically at him.

Henry Goldman didn't hear the payment he expected. Larry's eyes returned to the price list, and Goldman's gaze followed suit, looking at General Electric's stock price...

"Oh my god. Is this short seller really that powerful? He's already driven GE's stock price down to $73!" Goldman exclaimed in amazement at the latest price.

Larry laughed and said, "...Actually, it just hit $68, and the stock price is starting to rebound quickly again!"

Henry Goldman stared at the price, his face full of regret, then he said earnestly to Larry,
"You know what? I just heard some amazing news on Wall Street... That's why I rushed over to find you. It's intelligence about General Electric..."

Henry Goldman drew out his words, adding to the suspense and making everyone anticipate that Larry would turn around and ask him what the news was about General Electric.
Klari simply nodded faintly, without saying a word.

With eyes glued to the price chart, watching General Electric's stock price, wondering which direction it would take.
Henry Goldman was getting impatient. He waited a while, but Larry didn't respond. After about ten seconds, he continued.
"...Do you know who I met?"

"I don't know? Are they from General Electric?"

"Yes! It's related to General Electric, but he's even more powerful... I met Mr. Morgan!"

Henry Goldman pronounced this renowned Wall Street name in an exaggerated tone.

But Larry didn't turn his head at all.

His eyes remained fixed on the price list. After a moment, Larry said casually, "Oh, that's quite a coincidence, Henry."

Henry's speechless. Are you commenting on me? Shouldn't you be asking me right now what this news is?

Meanwhile, the clock on the wall of the sales office had already pointed to 11:30 a.m.

The stock quote machine clicked and clacked, and the latest paper tape was picked up by the order clerk.

The clerk, who looked somewhat like a girl, cleared her throat and called out towards the price quote machine, "General Electric! $69 3/4."

Henry Goldman didn't get Larry's inquiry, but he did get another sharp drop in GE's stock price.

Goldman turned to look at the price chart with some surprise, then asked Larry in confusion, "Why is this stock falling again? It was just $72 a moment ago, and now it's down to $69. This stock is really..."

“Who knows?” Larry stared at the price list, his tone calm and relaxed.

Larry could honestly say that, because he genuinely didn't know what the stock would do next.

Larry knew that at this moment, there were definitely more than just one or two funds repeatedly fluctuating in this stock! At this moment, they were stunned by the sudden sell orders and the continuous price collapse of the stock. At this moment, these funds were already fighting each other on their own.

The situation in northwestern Shanxi is in complete chaos!
Larry chuckled and added in his mind.

(End of this chapter)