Chapter 62 Margin Trading Account Activated-Tornando-se um Capitalista a Partir de uma Posição Totalmente Alocada em Ações A-shares(Assassino Picante)

Page (1/3)
Friday, April 24.
Unlike the bank-led market dump on the 23rd, Huaxin Securities, the leading brokerage stock, took the lead in triggering a sell-off right at the morning open.
Opening at 25.4 yuan, it plunged to 24.62 within less than 10 minutes, a drop of 3.07%, dragging other brokerage stocks down along with it.
With the brokerage sector—the "bull market standard-bearer"—sliding, and the banking sector—the "stabilizing anchor"—failing to step up, a bloodbath was inevitable.
After hitting the daily limit-down yesterday, Zhang Yang had deliberately researched what happened to ST Zhongfangji, and he actually managed to find the cause of the decline.
It turned out that at 8:00 PM on April 24, ST Zhongfangji was scheduled to disclose its first-quarter financial report, and some funds were rushing to exit beforehand.
This round of rallies in ST Zhongfangji was entirely driven by a rebound in the manufacturing PMI data, coupled with its status as a leader in textile machinery manufacturing; this by no means guaranteed a recovery in its financial performance.
The moment the stock opened 4.21% higher in the morning session, Zhang Yang liquidated his position, refusing to gamble on the quality of the upcoming first-quarter report.
He had invested a total of 20,000 yuan in ST Zhongfangji, making a profit of 4,351.79 yuan, for a total gain of 21.76%.
In contrast to the sluggishness of banks and the steep decline in brokerages, the coal sector—which Zhang Yang had previously predicted—saw its leading stock, China Shenhua, continue its upward trend, gaining 3.63%.
Changjiang Electric Power was no less impressive, surging by 7.63% on double its usual trading volume.
When Zhang Yang originally bought China Shenhua and Changjiang Electric Power, it was because he sensed that the banking sector was due for an adjustment that could drag the broader market downward, prompting him to buy resource-based sectors like coal and utilities.
In the A-share market, trading purely based on financial performance never works, but trading without looking at performance at all is sheer mockery of one's own money.
Because performance equals support; a stock with good fundamentals is bound to have a floor beneath its drops.
Take Changjiang Electric Power, for example. Its net profit for the first quarter of 2009 was 837.8 million yuan, compared to 251.6 million yuan in the first quarter of 2008, representing a year-on-year increase of 232.98%.
With that level of earnings growth, which main force institutional player would dare to smash the market?
If an institution really forced the share price down, retail investors would genuinely dare to go all-in against them without the slightest hesitation.
Having sold ST Zhongfangji in the morning session and cleared out Changjiang Electric Power and China Shenhua by the close, the first two stocks yielded profits of 4,351.79 and 6,201.34 yuan respectively, while Shenhua resulted in a loss of 646.23 yuan. His total profit after clearing these positions stood at 9,906.9 yuan.
At this point, Zhang Yang's securities account held a total of 198,400 yuan.
As for his bank card, Lai Weijie had paid the remaining balance of 40,000 yuan, research report revenue contributed 11,700 yuan, and Zhang Yang had withdrawn 20,000 yuan to give to He Jing, leaving a balance of 31,740 yuan in the bank account.
Combined with the 198,400 yuan in his securities account, Zhang Yang now had a total of 230,000 yuan at his disposal.
Without hesitation, he chose to transfer his funds from his securities account back to his bank.

Page (1/3)

Page (2/3)
Because he hadn't purchased Treasury bond reverse repurchases the previous day, the 88,000 yuan he usually tied up in those repos was also successfully withdrawn by Zhang Yang.
[Respected customer, your China Construction Bank account ending in 2389 received a securities-to-bank transfer of 198,442 CNY (in words: one hundred ninety-eight thousand four hundred forty-two yuan only) on April 24, 2009, at 15:04. Available balance: 230,192 CNY.]
Taking advantage of the banks still being open, after withdrawing the funds from his securities account, Zhang Yang rushed over to the China Construction Bank branch on Wudong Road to wire the funds to the account specified in his contract.
...
After getting the transfer receipt, Zhang Yang took a photo of it, sent it to Zhang Xiaolong's QQ account, and called him.
"Beep, beep—"
After a few rings, the call went through.
"Hello, Junior Brother Zhang."
"Senior Brother Zhang, I've transferred the money over. I also sent a photo of the large-transfer receipt to your QQ account, take a look."
"Hold on a second."
A few clicking sounds of a mouse came from the other end of the line before Zhang Xiaolong hurriedly spoke: "I see it, Junior Brother. I'll submit your margin financing information right away, and your trading manager will contact you shortly. Keep an eye on your phone."
"Got it."
The two hung up the phone.
Shortly after.
Trading manager Zhong Qifeng called.
"Hello, Mr. Zhang. Manager Zhang has just processed a 5x margin financing account for you. Combined with your own principal, you now have a total of 1 million yuan. Starting from trading sessions next Monday, my online hours are from 9:00 AM to 3:00 PM. You can call this number anytime to trade stocks."
"That fast?"
Zhang Yang was amazed by the other party's efficiency, but worrying about the daily interest on his financed account, he asked: "You don't charge interest over the weekend, right?"
The daily interest would be over two hundred yuan, which meant more than four hundred for two days. If they charged for weekends, he would definitely have to have a word with them.
"Of course not," Zhong Qifeng replied with an easy laugh, continuing, "The leveraged funds only become active starting next week."
"Alright, talk to you next week."
"Talk to you next week."

Page (2/3)

Page (3/3)
The two hung up.
Still sitting on a bench inside the China Construction Bank, Zhang Yang stood up. At this moment, his operating capital had grown to 1 million yuan.
If he went all-in with a full position, a 1% rise would mean 10,000 yuan, and a daily limit-up would mean 100,000 yuan. Compared to trading with 200,000 yuan, the speed of making or losing money would increase exponentially.
Zhang Yang had only one thought at that moment: to aggressively trade the A-share market, accumulate his initial capital first, and then ditch the high-risk off-exchange margin financing.
...
Over the ensuing weekend, quite a bit of news arrived from the capital markets.
On the macroeconomic front: On April 25, the World Health Organization (WHO) declared the H1N1 influenza outbreak originating in Mexico and the United States to be a "Public Health Emergency of International Concern."
The sudden flu sparked fierce discussions across foreign internet forums, with many expressing concern over economic recovery, while industries such as aviation, tourism, and consumer goods saw their investment priorities downgraded by Goldman Sachs.
On April 26, the 4th Central China Investment and Trade Fair International Financial Forum was held in Luzhou, Anhui Province, focusing on financial cooperation and development amid the global financial crisis.
Also on April 26, the two sides of the Taiwan Strait signed the Financial Cooperation Agreement, covering regulatory cooperation in banking, securities, futures, and insurance, as well as monetary management cooperation, such as banknote exchange and clearing mechanisms.
Regarding individual stocks: On April 25, Zhongxi Pharmaceutical released multiple announcements, including the termination of its stock listing, the reduction of its stake in Kangdaer, and a share-swap absorption merger with Hudu Pharmaceutical.
On April 26, due to consecutive losses in 2008 and 2009, the Shenzhen Stock Exchange applied a delisting risk warning to Boying Investment, changing its stock abbreviation to ST Boying.
Additionally, it is worth noting that although news of Minmindong's (Huaying Technology) share structure reform and restructuring had already sparked market attention on April 9, discussions regarding its subsequent progress continued to heat up on the 25th and 26th.
Since Zhang Yang was operating with 5x leverage, he had to ensure stable profitability.
The fermentation of market news allowed him to spot several potential directions, such as pharmaceutical, banking, insurance, and Central China investment sector concepts.
As for Minmindong, a popular market stock, he chose not to look into it.
The reason was simple: trading market hype with 5x leverage could lead to a margin call in the blink of an eye.
Zhang Yang only chased visible money. For instance, the newly signed Cross-Strait Financial Cooperation Agreement might drive further gains in the A-shares, as this was a tangible positive catalyst for banks and brokerages.
If the two "engines" of banking and securities fired up simultaneously, the market performance in the coming week wouldn't be too bad.

Page (3/3)