Chapter 59 Signing the Margin Trading Contract-Tornando-se um Capitalista a Partir de uma Posição Totalmente Alocada em Ações A-shares(Assassino Picante)

They always say the graduation season is the breakup season, and Tao Yuangang now seriously suspected that Zhang Yang was love-brained, having lost his mind after being abruptly and mercilessly dumped by his girlfriend.

Otherwise, why else would he max out his leverage right off the bat? This was completely unlike something an investment major would do, showing zero awareness of risk management.

People who maxed out their leverage weren't rare, but those who could genuinely make money using leverage could be counted on one hand.

Anyone who had studied finance knew that the best way to make steady, guaranteed profits in the A-share market or any other stock market was to trade with other people's money.

That was why many fund managers ignored economic cycles, industry prospects, and macroeconomic data, always diving in with full positions anyway. Since it wasn't their money they were losing, they instead grew obscenely wealthy by collecting fund management fees.

"Five times leverage, 800,000. Xiao Long, give us the lowest interest rate, consider it a favor to me." Tao Yuangang reached into his pocket and pulled out a pack of slender Chunghwa cigarettes, extracting three and offering them around.

If it were anyone else, he wouldn't meddle, but Zhang Yang still had to help him put together market research reports to fool the boss, so he had to step in.

Zhang Xiaolong accepted the slender Chunghwa. If he remembered correctly, a single pack cost around 200 yuan, making it the finest of the fine.

"Click—"

Tao Yuangang produced a kerosene lighter and lit the cigarette for Zhang Xiaolong.

A moment later.

The office was hazy with smoke.

None of the three men rushed to speak, choosing instead to enjoy the tranquility brought by nicotine—precisely the effect Tao Yuangang wanted to achieve.

As the saying went, cigarettes pave the way and alcohol builds the bridge; tobacco and liquor could resolve ninety percent of everyday trivial matters without the slightest exaggeration.

Tao Yuangang glanced at Zhang Yang, figuring the latter should have calmed down by now.

Then, he looked back at Zhang Xiaolong and asked, "What's the best interest rate you can offer?"

Zhang Xiaolong took a deep drag, the glowing tobacco embers flaring brightly. He looked at Tao Yuangang and said, "A minimum of 10 percent. That's the highest authority I have. If you want it any lower, you'll have to talk to our boss, President Liu."

"Ten percent on 800,000 means a daily interest rate of 0.0274 percent. In other words, regardless of whether you make any trades or not, you'll have to pay the margin financing company 219.18 yuan every single day." Tao Yuangang looked at Zhang Yang, seeming to offer one final warning.

"Understood, clear."

Zhang Yang knew what Tao Yuangang was hinting at, but in his view, leverage was simply a normal financial tool. The reason humans dominated fierce beasts like lions and tigers was precisely because they knew how to utilize tools.

Following that, he looked at Zhang Xiaolong and asked, "I have another question for Senior Brother Zhang: do non-trading days incur daily interest?"

"It depends on whether you choose to hold stocks over the weekend or not. We calculate interest by the day. If you clear out all your stocks on Friday and choose to settle the interest, then Saturday and Sunday won't accrue daily interest."

Zhang Xiaolong paused for a moment before continuing, "If you choose to continue holding stocks, you'll still have to pay the daily interest for the two weekend days because you're occupying the funds."

This explanation was already crystal clear. Whether or not to pay the two days of weekend interest entirely depended on Zhang Yang's actions on Friday.

"Understood." Zhang Yang silently made a note of it and asked again, "Then who will be the trading manager assigned to work with me on a daily basis?"

Seeking off-site margin financing in 2009 meant that the actual securities account was not in your own hands; you had to coordinate via phone with the financing company's trading manager, having them execute manual orders on your behalf.

This was also why many illegitimate financing companies could fool clients with simulated trading platforms and then abscond with the funds.

Zhang Xiaolong replied, "Let's not rush into that. They should all be eating or resting right now. Let's sign the contract first, what do you think?"

"That's fine."

"Then give me a moment."

...

Seeing that Zhang Yang was insistent on pulling the leverage, Tao Yuangang had nothing more to say, and Zhang Xiaolong wasn't about to pass up a deal for the sake of his own performance metrics.

A short while later.

A freshly printed contract, still warm to the touch, was placed before Zhang Yang.

Zhang Yang and Tao Yuangang each carefully inspected the clauses, after which Zhang Yang signed his name and pressed his fingerprint in red ink pad.

"The contract is in duplicate, one copy for each of us. You must keep this safe. Also, the financing program won't be activated until your 200,000 yuan is transferred into our company account. If you have any questions then, you can ask me or your trading manager."

"Alright, understood."

"Let's go then, and see which manager catches your eye."

Zhang Xiaolong put the contract into a drawer, then stood up and looked at Zhang Yang and Tao Yuangang.

Zhang Yang also put away his contract. The details and terms had basically been settled now.

A 200,000 yuan security deposit, five times leverage, 800,000 yuan in financing, a daily interest rate of 0.0274 percent amounting to 219.18 yuan per day. The interest settlement date would be chosen by Zhang Yang, but it could accumulate for a maximum of 30 days—meaning interest had to be settled at least once every 30 days.

...

The three of them then moved to the trading and office area of Hongyue Investment. At this moment, the trading managers, having just finished eating, were chatting idly among themselves.

"Hey, Brother Wang, did any clients on your end face a margin call this morning? The morning dip was a bit fierce—the Shanghai Composite opened down 0.57 percent, and the only client I had left got wiped out."

"I still have two clients. One of them must have gone blind with desperation, pushing their leverage all the way from 2x to 10x. If it drops any further this afternoon, I'll have to execute a forced liquidation on him."

"Yesterday's drop was way too brutal. The broader market plummeted 2.94 percent, and both of my clients hurriedly injected additional margin."

"Same here on my end."

"That's gamblers for you. Too fascinating."

These trading managers in charge of operations were not finance majors in the orthodox sense; some of them only had a junior high school education.

Client liquidations meant nothing to them; on the contrary, they served as little more than jokes to share over tea and leisure.

"Who doesn't have an available client slot right now?"

Zhang Xiaolong strode into the trading area, his gaze sweeping over all the trading managers.

The trading area was a large office space of about 500 square meters, with each trading manager having their own workstation. At this moment, more than forty men and women turned their gazes toward Zhang Xiaolong.

Looking at such a large-scale trading office area, Zhang Yang couldn't help but marvel inwardly at the corporate scale of Hongyue Investment. Just from the margin financing business alone, how much money must they make in a single day?

"Me, Manager Zhang, me! I don't have any clients on hand right now, I can do a one-on-one pairing."

"I don't have any clients either."

"Manager Zhang, I don't have any either."

About six or seven people stood up and hurried toward Zhang Xiaolong.

When they arrived, Zhang Xiaolong looked at Zhang Yang beside him and said, "Pick one. None of them have active clients right now, so they can serve you better."

"Who has been with the company the longest?"

As soon as Zhang Yang finished speaking, a middle-aged man of about 37 wearing silver-framed glasses immediately raised his hand and said, "I've been here the longest. I'm among the company's first batch of trading managers."

"Then it's you."

Zhang Yang made the final decision on the spot.

A trading manager sounded similar to a fund manager, but in reality, they were worlds apart, and their capabilities were not on the same level at all.

These so-called trading managers essentially just executed the trading instructions they heard on their own computers. The difficulty of the job was arguably less than that of a court stenographer.