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

Chapter 282 The Battle of Short Squeezing
Early Monday morning, at 6:30 a.m., dozens of traders had already gathered under the sycamore trees outside the New York Stock Exchange.

Peter Pan, a floor trader at Paine Weber Securities, arrived early as usual, only to find the atmosphere unusually strange. The veteran traders weren't smoking pipes and chatting as usual; instead, they were talking in hushed tones, their brows furrowed, their eyes frequently glancing towards the exchange's entrance.

“Peter, have you heard?” A colleague pulled him aside, his voice tense and strained. “General Electric, those damn short sellers are going to be in big trouble.”

Peter Pan's heart skipped a beat. He had absolutely nothing to do with those "damn short sellers" and "stupid bulls," but every time he heard someone say, "Some people are going to be in trouble," he knew what that meant...

Some fathers lose all their money, and some of them go to the rooftop, and eventually, one or two of them jump off.

Like one of Peter Pan's cousins, he did it when he was 51.

The colleague, oblivious to Peter Pan's unusual expression, continued talking about the afternoon, "Speaking of which, J.P. Morgan is really ruthless! He actually set up an unprecedented trap, betting that those people would short General Electric. Of course, Morgan just wanted to destroy them..."

Peter Pan nodded blankly. He certainly knew General Electric—the company, formed this year by the merger of Edison General Electric and Thomson-Houston Electric, was a formidable entity, but its stock price was less than $40 at the close of trading on Saturday noon.

Peter Pan still remembers the moment he watched in astonishment as his two orders were instantly executed before noon. It's fair to say the short sellers were insane back then, shorting General Electric as if it were the end of the world, without any reason, until they closed out their 30,000 short positions and immediately bought 30,000 long positions.

A total of 6 shares were traded, still at the absolute low of $40. Even that couldn't stop the downtrend. The final transaction price actually dropped by one and a half points before reaching the lowest price of the day.

Well, now! Those short sellers who went absolutely crazy the day before yesterday are going to pay the price for their greed.

Even so, recalling the greed of those people did not make Peter Pan feel any better, because he was reminded of his cousin again.

At 7:00 AM sharp, the trading floor opened. Peter Pan followed the flow of people in and immediately sensed an unusually tense atmosphere. Several veteran traders were whispering among themselves in the General Electric price quote area on the right side of the blackboard, including Jackson, a short-term trader known for his short selling.

“Look at Jackson’s expression, it’s like he’s swallowed a fly,” a colleague whispered to Peter Pan. “I heard he’s placed a lot of short orders for General Electric.”

"Is he acting as an agent for someone else?" Peter Pan turned to ask his colleague.

My colleague shook his head and said, "What's the difference? He might be handling orders for those big shots, or those clients might not care whether their short positions cause huge losses. But what about him? Those few hundred shares he placed for himself could wipe him out!"

Peter Pan didn't want to say anything more. He could feel the heavy atmosphere around him, as if some people had already felt death beckoning them, hence their ashen faces.

The air at the New York Stock Exchange smelled of death.

Peter Penn silently walked to the exclusive trading area of ​​Paine Weber and opened his notebook. It contained records of General Electric's recent price movements—a series of seemingly unbelievable fluctuations. General Electric had a prestigious background, but clearly, market opinions on it had been extremely divided.

At that moment, the copper price quotation strips on the pillars of the hall began to click. The stock quotation machine, printing 280 characters per minute, started working. Traders immediately gathered around to prepare their pre-market orders.

Because it's Monday, floor traders at the New York Stock Exchange must review the performance of key stocks from the previous week.

At 8:45 a.m., an exchange official began writing the opening reference price on a small blackboard. When he wrote General Electric, he paused, erased it, and rewrote it three times. This small action was noticed by several senior brokers, who quickly exchanged glances and then silently adjusted the numbers in their notebooks.

Peter Pan noticed that Jackson, who was shorting the stock, had turned pale.

After reviewing the stock price, the trading floor began receiving pre-market orders from various brokerage firms. As Peter Pan passed by, he noticed that the floor traders at the central counter all had grim faces. They leaned against the wooden counter, glaring at each other with hostile expressions.

Peter Pan felt somewhat depressed. He was secretly glad that he never took the opportunity to place an order for himself, and at the same time, he prayed that he would not receive an order from General Electric today, so that he would not have to come to this "graveyard" central counter.

But he was disappointed. The first order he received this morning came from Washington, D.C., and someone wanted him to buy 3500 shares of General Electric after the opening price was set.

Peter Pan had no choice but to go to the central counter with his order, mingling among a bunch of zombie-like traders and listening to their heavy breathing.

At 10:00 AM sharp, the opening bell rang. Exchange officials began announcing the names of stocks and bonds, while brokers in the trading floor shouted out bids and asks.

When the report came to General Electric, after a brief silence, a trembling voice shouted, "General Electric, purchase price $118!"

The hall fell silent. The traders stared blankly at the person who had spoken. Then, the crowd erupted in incredulous gasps.

"$118!" Peter Pan could hardly believe his ears. The stock, which closed at less than $40 on Saturday, had nearly tripled overnight!
In that instant, Morgan's name had been muttered hundreds of times by those ashen-faced traders...

Panic quickly spread among short-selling traders.

Jackson, the trader who had just placed orders for both his client and himself, frantically pushed his way to the trading desk, shouting at the top of his lungs, "Buy to close! Any price!"

But there were no sellers, not a single seller.

On the contrary, buy orders surged in like a tidal wave, with countless trading orders pouring in from all directions. Traders who could squeeze to the counter were gesturing wildly and vying to drive up the price. In less than ten minutes, the price had soared to $125. Peter Pan saw a young trader next to him buckle in his knees, only managing to stay upright thanks to someone catching him.

"Short squeeze! It's a short squeeze!" The word spread quickly among the crowd.

A short squeeze is a classic and dramatic phenomenon in the financial market, mainly a chain reaction in which short sellers of stocks or futures are "squeezed out" and forced to buy, which in turn pushes up prices further.

Today, just 10 minutes after General Electric opened, with less than 400 shares traded, the price had already been driven up to around $125. Based on past experience, Peter Pan estimated that things wouldn't end well today.

In the following minutes, the vicious cycle of short squeeze began to emerge.

Traders who predicted a drop in GE's stock price borrowed shares and sold them, hoping to buy them back at a lower price. Now, instead of falling, the price has surged, leaving them facing huge losses and even forced liquidation.

Short sellers were forced to buy stocks to cover their positions, and this concentrated buying further pushed up prices. The higher the price rose, the more short sellers faced losses and pressure to close their positions, thus joining the buying frenzy and causing prices to continue to soar.

Peter Pan struggled to remain calm. He watched as Jackson frantically scurried through the trading floor, pleading for shares from every possible seller, but no one offered a helping hand. In this dog-eat-dog world, compassion was a luxury. At 10:30 a.m., GE's stock price broke through $140. The temperature in the trading floor rose with the heightened emotions, a mingled stench of sweat, cigars, and despair.

Peter Pan's firm, Paine Weber, also had a small short position, but fortunately, he himself did not participate. There may have been a large short seller who shorted 3 shares in the market, but fortunately, he reversed his position and went long at the last minute.

Peter Pan looked at the short sellers, whose faces were filled with fear and disbelief. Some had collapsed, slumped in a corner; others were like madmen, repeatedly saying, "This is impossible."

By this time, news from the newspapers had already spread throughout the market: General Electric had acquired a revolutionary motor product and was organizing an unprecedented giveaway of electric cash registers. Rumors circulated that the company was actively transforming itself to counter short sellers. Therefore, this ambitious transformation not only guaranteed huge profits but also signified that the new company had secured a commanding position in the era of electrification.

“It’s not just about electric motors,” a well-informed broker whispered to his colleague. “I heard that the Morgan financial group is also accumulating shares heavily; they want to take complete control of the company.”

Peter Pan suddenly realized. This wasn't ordinary volatility; it was a meticulously planned capital game. The short sellers had fallen into a perfect trap.

As time went on, the panic not only failed to subside but intensified. Short sellers realized that if they couldn't find buyers, prices could rise to any level. This fear drove them to buy indiscriminately, further exacerbating the short squeeze.

Just then, Peter Pan saw two familiar faces walking towards him. One had a slicked-back hairstyle, and the other was the rude guy in the blue jacket he had encountered before. Both of them looked furious.
.
Unlike the silent traders, Quincy with his slicked-back hair never kept his frustrations to himself. As he walked, he complained that the guy in the blue jacket next to him had disrupted his selling rhythm, causing him to forget to close his short position of 2000 shares. Although the transaction price of those 2000 shares was high, he was now losing more than $50 per share, which amounted to nearly $10 for 2000 shares!
"That's half of my fortune! If it weren't for you, you unlucky bastard... how could I have forgotten to liquidate these stocks?" The slick-haired man continued to curse at the rude guy in the blue jacket with a face full of resentment.

Meanwhile, Van der Lip, wearing a blue jacket, was also filled with anger.

On Saturday, Van der Lip had been supporting General Electric's stock price and had accumulated a position of tens of thousands of shares. However, when he learned that GE's stock price had started to fall, he was completely unprepared and could only sell his shares as the price continued to fall, resulting in a loss of nearly $10.

Before the market closed, he instructed his assistants to short sell as much as possible. By the close of trading that day, in addition to the stocks he had accumulated in the previous days, he held short positions of more than 5.8 shares.

I had expected the stock to fall further, but then news broke on Sunday that General Electric held some kind of press conference, which dispelled all the bearish sentiment...

Nearly 6 short positions! Some of them had a cost basis of over $50, and the total loss has now exceeded $250 million!
This is an astonishing number.

Previously, the young master said he didn't want his total short position to exceed the $10.6 limit... He hasn't exceeded it yet, but the problem now is that even with $6, he's lost an astronomical figure he can't even imagine now...

$250 million!!

Damn, last time a new fund company on Wall Street raised funds, it mobilized all the rich people in New York City and only raised a little over $400 million.

I've lost so much money in one go!!
The fear, anxiety, and even despair of facing death that rose from the depths of Van der Lipp's heart made him even more chilled, and he could only feel cold sweat streaming down his forehead...

Quincy only lost half his life and is already acting like he's going to die... but what about me?

Van der Lip thought that even if he combined all his wealth and even his family's assets, it wouldn't be enough to cover the losses!

If only I hadn't presumptuously tried to share the boss's burdens!
If I simply place orders according to my boss's instructions, then if we lose money, it's his problem, not mine...

Now, an eager, hardworking employee, trying to "perform" in front of his master, is probably facing the threat of death!
Van der Lipp had been experiencing tinnitus since this morning, with an endless, sharp noise echoing in his ears, causing him to have prolonged auditory hallucinations.

That's why Vanderlip was completely absorbed in his own world, ignoring Quincy's constant chatter, whom he hated the most, because he was utterly lost in his own thoughts...

In the half hour after the market opened, he thought at least a hundred times about how to die so as not to implicate his family.

Van der Lipp's assistants dared not get too close to him; they knew their team's predicament and kept their distance. But for some reason, he didn't get angry today. Instead, he seemed to be sleepwalking, looking around aimlessly, oblivious even to the whispers in his ear!

Van der Lip looked around blankly, and suddenly, he spotted Peter Pan in the crowd!
In that instant, the muscles in Vanderlip's face came alive again, his lifeless face regained its vitality. He then took a few steps forward, grabbed Peter Pan's shoulder, and loudly questioned him, "Hey!! Your client, the guy in the New York branch who shorted, has he closed his position yet?"

Peter Pan was startled and took a half step back, but Vanderlip held onto his shoulder relentlessly, determined to get an answer.

Peter Pan, exasperated, could only wave the order book in his hand and explain, "Look closely! I have an order from Washington to buy 3500 shares, but I haven't found a seller yet! There are so few sellers right now, this is a fucking short squeeze!!"

Peter Pan swore, but Vanderlip wasn't angry. A twitching smile appeared on his face as he muttered, "...Great, now I'm not the only one who's dead!"

Just then, the trader behind the counter called out the latest transaction price.

"General Electric, $151 and a quarter, just traded 500 shares!!"

The traders, already crowded in front of the middle counter, started shouting loudly, seemingly extremely surprised that the stock price had broken through $150, but also seemingly not so surprised, because it was simply inevitable.

Van der Lip looked up at the ceiling of the stock exchange. As the bad news gradually became more real, he felt a return to real breathing and thought.

“Great! My God. Praise be to you!” Van der Lip’s face suddenly broke into a smile. He laughed as he took off his blue coat, stared intently at Peter Pan, and then threw the coat at him. “You fucking watch my coat. If you wrinkle it, I’ll make you pay!”

Van der Lip's eyes were almost bloodshot. He tossed his coat to a bewildered Peter Pan, then suddenly turned around and punched Quincy, the slick-haired man who had been nagging beside him!

Quincy's nose was immediately flattened, and blood splattered everywhere.

Taking advantage of the opportunity, Vanderlip leaped forward and began relentlessly beating Quincy with his fists, yelling as he did so, "I told you to shut up! Shut up! You damn devil!!"

Faced with such a sudden turn of events, the surrounding traders took a step back in surprise, and the exchange fell into a deathly silence.

People just watched numbly as the two rolled on the ground, beating each other in different ways, watching blood splatter on the ground, in the air, on faces, and on fists, but no one tried to step forward to stop them.

Just then, the clerk's monotonous voice came from the middle counter: "General Electric, $151!"

(End of this chapter)