At the same time, the moment the final vote results for the Sunderland voting district were announced and the number of Leave supporters surged ahead.
On the British pound exchange rate market, global capital from various systems reacted instantly.
Inside the market, countless long investors, speculators, and many major institutions holding long positions, at this moment, scrambled to cut losses and stop-loss, concentrating on reducing their long positions.
And almost simultaneously.
A group of major short-selling institutions in the market also instantly increased their positions to squeeze the longs, investing huge amounts of capital to heavily short the British pound.
With the ebb and flow of these long and short forces.
At 7:17 AM Yan Jing time, the British pound exchange rate directly plummeted from above 1.5000 to around 1.4680, hitting a new recent low at a faster pace than its previous rebound and rise, also enabling many major short-selling institutions in the market holding massive short positions to turn losses into profits in an instant.
"My heavens, how can the final vote results for the Sunderland district be so different from the preliminary vote count predictions?"
As the British pound exchange rate plummeted, leaving no time and making it impossible to concentrate on reducing positions and stopping losses, within Tianhe Capital, in the main fund trading room, Gu Chijiang's face instantly turned extremely grim and he couldn't help but exclaim.
"In just one minute..."
The massive long positions he held changed from an unrealized loss of tens of millions of US dollars to an unrealized loss of over 200 million US dollars.
This pushed his mental endurance to its limit instantly.
"General Manager Gu, the British pound exchange rate has directly plummeted below 1.4700, hitting a new recent low," Xie Hongxing said hurriedly. "Our position losses have exceeded the initial planned expectation and have reached the stop-loss line. Regardless of the subsequent vote results from other voting districts, we should... concentrate on stopping losses!"
"Stopping losses at this point..." Gu Chijiang's nerves were taut, he frowned deeply, and remained unwilling.
Xie Hongxing said, "If we don't take advantage of the market's current ability to absorb concentrated stop-losses, once sentiment collapses again later, and once the lead of Leave supporters further expands, then we might really be unable to even perform concentrated stop-losses and can only wait for the fund's positions to be completely liquidated."
Gu Chijiang heard Xie Hongxing's words and became even more conflicted.
He knew Xie Hongxing was right: once the market fully shifts towards a bearish direction and once the short-selling forces in the market gain absolute dominance.
Once the market's overall expectations completely shift towards the Brexit expectation.
Then, what awaits the British pound exchange rate will be an even more brutal downtrend and an even fiercer plunge.
Currently, their fund's overall positions have already lost over 200 million US dollars.
If they don't concentrate on reducing positions and stopping losses now, once the market trend moves in an extreme direction unfavorable to them.
Then, with a further drop of at most 350 points, he will face the entire fund product being completely liquidated.
If this main fund product managed by him were to be liquidated.
Then, it would also mean that the 'Tianhe Capital' company he painstakingly built would be on the verge of bankruptcy.
After all, approximately 35% of the capital in this main fund product was invested from his company's own funds, and it was also nearly all the capital he had accumulated by working hard for most of his life.
Therefore, the outcome of liquidation was something he could not accept and simply could not bear.
"General Manager Gu..." Xie Hongxing saw that the British pound exchange rate, under the reversal of market sentiment, was still plunging.
In the brief moment he spoke, in one or two minutes, it had already dropped another 20 points.
He couldn't help but grit his teeth and hurriedly urged again, "Where there's life, there's hope. We must stop losses and preserve most of our principal, otherwise... once liquidated, there will be absolutely no chance of recovery."
Gu Chijiang, urged by Xie Hongxing,
paced back and forth in the trading room, his heart filled with immense anxiety.
With already a substantial loss of 200 million US dollars, to ask him to decisively stop losses and admit defeat, he was truly unwilling.
Furthermore, at this very moment.
Facing the British pound exchange rate plummeting to a nearly two-year low, he still harbored a certain amount of wishful thinking.
After all, he felt that although the current voting results from the Sunderland region completely deviated from the previous expectations of various institutions and an unexpected situation had occurred.
However, out of a total of 382 voting districts.
Among tens of millions of total votes, this lead of 30,000 people was actually still easy to reverse.
At this moment, he still worried that once he concentrated on stopping losses and exited at this position, subsequent newly announced voting results from other districts would reverse the disadvantage and restore expectations.
In that case, then large-scale concentrated stop-losses and position reductions at this moment would be a completely wrong trading decision.
"Let's wait a bit longer." Countless thoughts flashed through his mind, Gu Chijiang hesitated for a while and finally gritted his teeth, saying, "This is only the third voting district; there are still over three hundred voting district results waiting to be announced. The current lead of over 10,000 for Leave is nothing significant given the scale of tens of millions of citizens. As long as the voting results from other major core regions can meet institutional expectations, then there will be no surprise in the final referendum result."
"General Manager Gu... at this position, if the exchange rate falls further, we will become increasingly passive." Xie Hongxing was very helpless regarding Gu Chijiang's indecisiveness at this moment, and painstakingly advised, "Our margin for error is only about 300 points, and based on the previous trend, that could very likely happen in one or two minutes.
Moreover, with the British pound exchange rate plummeting directly, it's difficult for the market to have strong buying absorption.
In other words...
Once the market trend goes wrong and bearish sentiment becomes one-sided.
Even if we see the rapid decline of the British pound exchange rate, trying to perform concentrated position reductions and stop-losses is fundamentally unrealistic.
Just like a moment ago, the British pound exchange rate instantly fell from 1.5000.
Across the entire range from 1.4700 to 1.5000, within this 300-point space, the trading volume was extremely low.
This means that all major long funds in the market, under the massive extreme short-selling pressure from enormous short orders, were simply unable to close their positions and retreat in a concentrated manner."
"I understand." Gu Chijiang gritted his teeth. "Let's wait and see, after all, this is only 2% of the vote results."
"Alright." Xie Hongxing saw Gu Chijiang's insistence, paused for a moment, and did not persuade him further.
Unlike Gu Chijiang's hesitation and wishful thinking, at this moment, in Mitsui & Co. (Hong Kong) Investment Company, in the main fund product trading room.
Sato, who was also a fund product manager.
Upon seeing the final vote results from the Sunderland district, which instantly triggered an avalanche-like trend in the British pound exchange rate, he instantly realized something was wrong.
After that, without waiting for the traders to remind him.
Sato sprang from his office chair and started shouting at the traders to stop losses and reduce positions.
"Mr. Sato, our fund has already incurred significant losses. If we concentrate on reducing positions and stopping losses at this point, once the British pound exchange rate rebounds later, then we will miss out on all market opportunities, and after the position weight decreases, it will be difficult to turn losses into profits again." As Sato's trading instructions were conveyed, team leader Yamamoto Hisaichi hurriedly reminded him, "The voting results from the Sunderland voting district were indeed somewhat unexpected, but I think the final vote result will still be within expectations; the problem shouldn't be too big. We don't need to be so aggressive with position reductions, do we?"
Sato gave Yamamoto Hisaichi a sideways glance and said, "Once the British pound exchange rate rebounds... haha, what if there's another sharp plunge? Then we'd all be buried in it."
"It can't be that bad," Yamamoto Hisaichi said. "The British pound exchange rate right now is already at its lowest in nearly two years. How much lower can it fall?"
"How much lower it can fall, only heaven knows at this point," Sato responded helplessly. "Unfortunately, with continuous losses, we can no longer afford to gamble. If we don't take advantage of the market's slight buying absorption now to concentrate on reducing positions and stopping losses, later... if the previous trend repeats, we will be completely liquidated."
"Alas..." Yamamoto Hisaichi heard this and also sighed helplessly.
Sato gritted his teeth and said, "Let's concentrate on reducing positions and stopping losses. This large-scale investment operation in the British pound exchange rate market, which caused such huge losses, the biggest problem lies with me. Later, after the positions are cleared and the group holds me accountable, I will bear all responsibilities. You don't need to worry."
For this Brexit referendum event.
He went his own way, and at an exchange rate level around 1.5000, invested a massive sum of up to 1 billion US dollars.
Now, the outcome is clearly worse than expected, and the losses have already exceeded the fund's overall position stop-loss line; he has no choice but to reduce positions and stop losses to control the extent of the losses.
"Mr. Sato, this has nothing to do with you," Yamamoto Hisaichi said. "The financial trading market is inherently uncertain; even if we made a wrong judgment and chose the opposite position direction, it's not your fault, but the market's fault."
"You don't need to say more." Sato raised a hand to interrupt Yamamoto Hisaichi and said, "Hurry up and reduce positions and stop losses. If the market quickly becomes one-sided towards the expectation of Brexit, I estimate that the time left for us to react and perform position reductions and stop-losses will not be much."
"Okay!" Yamamoto Hisaichi responded.
Immediately, he quickly instructed the trading teams in the trading room to concentrate on reducing positions and stopping losses for their long positions.
Following the large-scale concentrated position reduction and stop-loss by Mitsui & Co. (Hong Kong) Investment Company's main hedge fund, the British pound exchange rate, without any new news to stimulate it for the time being, was suppressed by a large number of long-position closures, and in just a few minutes, continued to fall unopposed, breaking below 1.4600.
"Damn it, it's broken below 1.4600! This downtrend is really rapid."
Seeing the British pound exchange rate continue to hit new lows on the market since the announcement of the 'Brexit referendum proposal,' countless short-term speculators in the market also exclaimed on online trading platforms.
"The oscillation range from 1.4700 to 1.5000 has also been broken."
"Now, can it be said that the British pound exchange rate has broken downwards?"
"Is this referendum really going to result in Brexit? Oh, my God... this is too outrageous, isn't it?"
"It is indeed outrageous. The way things are developing and the announcement of the referendum results are completely different from what major market institutions expected before!"
"I really didn't expect the British pound exchange rate to hit a new low so quickly."
"On the market, it feels like the shorts are going crazy, and the number of short orders is continuously surging."
"Looking back now at the 'Huayi Chengyuan No. 1' main fund product managed by General Manager Su, one can only exclaim that General Manager Su is truly amazing; he heavily shorted the British pound exchange rate and surprisingly bet correctly once again."
"Alas, I should have followed General Manager Su's lead back then!"
"Is it still too late to short the British pound exchange rate now?"
"If the referendum result is indeed Brexit, then continuing to short the British pound exchange rate at this moment is definitely still entirely feasible."
"Crazy, this plummeting trend is so smooth, there's simply no resistance."
"After Sunderland, which voting district will announce its data first?"
"Can the number of Remain supporters still overtake? Why do I feel that the outcome of Brexit, for now, is still uncertain?"
"The long chips in the market have completely loosened, haven't they?"
"Indeed, they have completely loosened. The current open long and short positions in the market have already shifted from previous net long positions to a net short position situation."
"Although the current voting results from a few districts do not have a very significant impact on the overall referendum result, but I think... the probability of success for shorting should still be greater than for longing."
"The shorts are still pressing their advantage, continuing to short the British pound. I'm not convinced anymore."
Just as countless retail investors inside and outside the market began to fully lean towards a bearish direction and started aggressively chasing positions, selling into the downtrend, and shorting.
Within 'Huayi Capital' company, managed by Su Yi.
And its affiliated 'Huayin International' Investment Department One, Investment Department Two, and the trading department of 'Aberdeen Asset Evolution No. 1 Main Hedge Fund'.
Meng Shengfei, Kong Fansheng, Frederick, and others.
After seeing the British pound exchange rate hit a new low since the launch of the Brexit referendum proposal, their hearts were greatly uplifted.
Among them, Meng Shengfei laughed heartily at this moment and said to Su Yi on the instant messaging channel, "General Manager Su, you're amazing! The results of this referendum are completely within your expectations, haha... All the accumulated chips of the major long institutions in the market are loosening, and the brutal situation of longs killing longs is continuously forming.
Subsequently, as long as the number of Leave supporters, as the data from each voting district is announced, can maintain a slight lead. I dare to assert that the British pound exchange rate trend will have an even more brutal downtrend, and the massive short positions held by our various institutions will be able to seize even more substantial profits."
"Old Meng, let's not get too carried away," Kong Fansheng calmly reminded him. "Out of over three hundred voting districts, only three have been announced so far, and the number of votes is less than 2% of the total. The uncertainty of the subsequent results is still very significant. I think... we still cannot be too optimistic."
"Manager Kong is right." Su Yi heard their conversation and nodded with a smile. "The final result will probably only be truly determined in the afternoon; before then, uncertainty still exists. Although we currently hold the initiative in the market, we still need to remain cautious and not use the large amount of unrealized profits at this time to engage in aggressive position increases. Otherwise, the long institutions in the market that haven't collapsed yet, taking advantage of positive data from subsequent important voting districts, could launch a strong counterattack that would still strangle us and threaten our positions."
(End of Chapter)