Becoming the King of Bottom Fishing After Going All-In on A-Shares

The room fell completely silent, with hundreds of eyes focused on Lu Chenzhou, all wanting to know how he dared to do that.

Wen Zhiyu stood in the corner, her fingers clenched so tightly they turned white, her nails digging into her palms.

I shorted at 16 yuan, and immediately shorted again after selling at the same price, with my entire position.

Her mind was racing, trying to understand the operation.

But she couldn't understand that going long and going short are opposite directions. At the same price, you should first close the long position and then open a short position with your entire capital.

This means he believes that the stock price at this level will neither rise nor remain flat, but will instead plummet.

But on what basis?

Why would he dare to short at 16 yuan, when the news of Buffett's investment had just been released and the entire market was scrambling to buy?

She stared at Lu Chenzhou's back, her heart pounding so hard it felt like it was going to jump out of her chest.

Her 3 yuan was her mother's life-saving money.

I've already made 3 from the 16 yuan doubling, 6, and I still need 24.

But instead of leaving the market, he went all in shorting.

She's using her money to keep gambling, and she's gambling everything.

Her lips pressed into a thin line, and her fingers clenched even tighter.

But she didn't say anything.

Because she remembered what he said: "Can you bear the consequences?"

Although she answered "I can," at this moment, she wanted to know more about what he had actually seen clearly; she needed a reason.

Otherwise, she might do something very extreme.

Lu Chenzhou looked calmly at Zhou Xingbang, but did not answer immediately.

It was as if he was organizing his thoughts, or perhaps confirming whether his logic was clear enough.

After a moment of silence, he spoke.

"Teacher Zhou, I just sold all my long positions at 16 yuan because the high point was reached after the positive news was priced in."

Do you agree with this logic?

Zhou Xingbang nodded, agreeing on that point. The key issue was his subsequent actions, particularly shorting BYD, which he completely failed to understand.

Lu Chenzhou continued, "But the high point is not the end; the high point is a range."

Within this range, emotions reach their peak, and then begin to reverse.

My shift from long to short positions wasn't because I was bearish on BYD's long-term value, but because I saw a turning point in short-term sentiment.

He pointed to the order book on the screen: "At the price of 16 yuan, the buying pressure looks very strong, with large orders of hundreds of thousands of lots piled up there."

But if you look closely, you'll see that these payments are decreasing.

It's not that it's being eaten up, it's that the order is being cancelled.

Those who placed orders were hesitant, afraid, and worried that they might have bought at a high price.

He paused, his voice calm: "Once the last person who chased the high price entered the market, no one else bought anymore."

Without buying interest, the stock price will fall.

Zhou Xingbang was stunned; this sounded somewhat reasonable.

Lu Chenzhou continued, "I went all in on shorting BYD at 16 yuan, not betting on how low BYD would fall, but betting on a reversal in sentiment."

The funds that rushed in this morning have an average cost of over 15 yuan, and they will hold on to them.

But when the stock price starts to fall, they won't sell; they'll wait for a rebound.

But what if there's no rebound? What if the stock price keeps falling?

When the price drops to 14, 13, or 12 yuan, how long can they hold on?

He looked into Zhou Xingbang's eyes: "When the first person who can't hold on starts to cut their losses, it will trigger a chain reaction."

Selling at a loss drives down prices, which in turn triggers even more selling at a loss.

This is a death spiral.

I went all in on shorting at 16 yuan, not because I was betting it would fall.

I knew for sure it would fall.

Moreover, it will drop significantly.

He pointed to the trading data on the screen: "The funds that chased the high prices this morning are conservatively estimated to be several billion Hong Kong dollars."

At least 30% of these funds were leveraged.

Their margin call level is between 12 and 13 yuan.

When the stock price falls below 13 yuan, the first batch of margin calls will occur.

This wave of liquidations will cause the price to plummet below 12 yuan, triggering a second wave.

This is an accelerating process that will not stop until all leveraged funds are liquidated.

The stock price will only stabilize when everyone who can't hold on chooses to cut their losses and leave the market.

His voice was as calm as if he were reading a pre-written script: "So, I went all in short."

Because I know this is not a "possible" opportunity, it is a "certain" opportunity.

The probability is close to 100%.

The room was completely silent.

Zhou Xingbang opened his mouth, but couldn't utter a single word.

He knew all of what Lu Chenzhou had said.

This is the most basic operating principle of the market.

But he never imagined that he could short the market with his entire portfolio at the price of 16.

It wasn't because he didn't know, but because he dared not.

Because a voice in his head was saying: 16 yuan is the peak, but there may be even higher peaks after the peak.

What if it goes up again? What if it goes up to 17 or 18 yuan?

This is a stock that even Buffett has bought; who would dare to short it?

Short selling will result in a margin call, and it will be a total margin call.

But Lu Chenzhou didn't hear that voice in his mind.

There was only one thing on his mind: Is the logic correct?

If the logic is correct, then execute it.

No matter how much money we have now, no matter what others think, no matter what "what if" happens.

He went all in because he had calculated the probabilities.

This is the gap.

Wen Zhiyu stood in the corner, and as she listened to these words, her fingers slowly loosened.

She got it.

It wasn't because she heard the word "death spiral".

She had learned it in her textbook.

It was because she saw something: Lu Chenzhou made this decision without any hesitation.

He wasn't gambling; he had truly seen things clearly.

He saw things that others couldn't.

The structure of emotions, the game of funds, the chain of leverage, and the transmission of margin calls.

A person who truly sees things clearly will not be wrong.

She didn't know where this confidence came from.

Perhaps it was because he made the right move when he bought at 8 yuan, or perhaps it was because he made the right move when he sold at 16 yuan.

Perhaps it's because everything he says sounds like a fact that has already happened.

Perhaps it's simply because she had no other choice.

She looked down at her phone.

The message on the screen was still the same from the hospital: "Ms. Wen's surgery is expected to cost 30 yuan. Please make arrangements as soon as possible."

She raised her head and looked at Lu Chenzhou's back again.

She had only one thought in her mind: He can't be wrong, he definitely can't be wrong.

As soon as Lu Chenzhou finished speaking, the numbers on the screen began to jump.

HK$15.90.

Someone gasped.

HK$15.80, HK$15.50, HK$15.00.

The stock price began to fall.

It didn't fall slowly; it plummeted straight down.

The intraday chart line plummeted from its high of 16.00, as if slapped through by an invisible hand.

14.50港元、14.00港元、13.50港元、13.00港元、12.50港元、12.00港元。

The atmosphere in the room seemed to freeze, and everyone stared wide-eyed at the continuously falling BYD.

Everyone stared at the intraday chart line that was falling at an almost vertical angle, their faces turning from red to white, from white to green, and from green to gray.