Chapter 41: [This Sickle is Really Sharp]
On Friday, October 10th, Zhongxin Securities opened sharply lower, with the call auction starting at a price of 19.60 yuan, representing a -7.20% drop. This marked the first time the price had fallen below the 20 yuan threshold.
However, after the opening of the market, Zhongxin Securities quickly rebounded and started climbing. There was a brief dip, but it did not fall below the opening price. The stock then surged upward, fluctuating higher throughout the day.
Fang Hong intervened by purchasing 500,000 yuan worth of stock during the opening call auction. He followed up with another round of buying, acquiring a half position. When the price dipped near the opening level, he completed his full position, acquiring the remaining shares.
The average transaction price was 19.66 yuan, and Fang Hong acquired 4,988 shares.
By the end of the day, Zhongxin Securities' K-line chart showed a positive line with bare feet and eyeliner. Although the closing price was slightly above the opening price, it was not an entirely positive signal as the final price was a true negative with a false positive appearance, closing at -2.27%, at 20.64 yuan.
However, Fang Hong's position was still in a profitable state, with a daily floating profit of +4.98%, amounting to a gain of 488,800 yuan.
After the market closed, Fang Hong reviewed the total assets in his securities account, which had now reached 10,294,900 yuan. He stretched with satisfaction, saying to himself, "Finally, I've crossed the 10-million mark."
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Monday, October 13th
It was the first trading day of the new week. Fang Hong continued his operation with Zhongxin Securities, which opened slightly higher by 0.78%.
One minute after the market opened, there was a turnover of 140 million yuan, and Fang Hong made his move, selling off some of his holdings. The stock price quickly dropped by -4.46% within half an hour.
At this point, Fang Hong decided to buy again, with an average transaction price of 19.80 yuan.
Throughout the early trading session, the stock fluctuated between -2% and -4%. But by 1:00 PM, after some positive news during the noon market break, Zhongxin Securities began to rise, with the volume increasing. By the end of the day, the stock price surged to 22.70 yuan, hitting the daily limit price.
Though the stock closed at 22.68 yuan, just below the daily limit, Fang Hong made significant profits. His floating profit for the day was +14.54%. After breaking through the 10 million mark yesterday, his daily profit today exceeded 1 million yuan, reaching 1,496,800 yuan.
At the same time, his total assets reached a new high of 11.7917 million yuan, with a cumulative return rate of +18,474.94%. The market benchmark during the same period remained almost flat, while Fang Hong's account curve continued to rise sharply, forming a "√" shape, as it had previously experienced a drastic fall under the original account holder.
In just three months, Fang Hong's returns had increased by over 184 times, with the snowball effect of compound interest causing his wealth to grow exponentially.
After closing the market software, Fang Hong thought to himself, "Xu Jingren and the team should be almost finished with the product..."
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Fang Hong left the Binhu community and headed to the Quantum Beat studio to check the progress. He then planned to have Cao Chenghui take the lead in initiating the angel round financing for Quantum Beat, with Fang Hong acting as an angel investor.
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Meanwhile, at Xinhong Securities, Zhang Qi, one of the vice presidents, was keeping an eye on Fang Hong.
"Mr. Zhang, based on Fang Hong's recent trading data, it seems like he's changed his trading style," said Zhang Qi's assistant.
"Changed his style?" Zhang Qi asked, intrigued.
"Yes, he used to focus on ultra-short-term trades with small-cap stocks, but his recent trades show he's been focusing on Zhongxin Securities," the assistant replied.
Zhang Qi thought for a moment and then responded, "It seems like he's now dealing with large-cap stocks that have high liquidity but also fast adjustments. His fund scale has also increased, indicating that his profit model is diverse."
In the market, as long as a trader can master a model that works, it's enough to generate profits. As for Fang Hong, it was clear that he employed multiple strategies, with his funds fitting into different models at various levels. If he didn't adjust his models properly, it could lead to losses.
The assistant continued, "Despite his changing style, his entry and exit points are as sharp as ever. For example, in the last four trading days, Zhongxin Securities rose by 1.80%, while Fang Hong's return rate for the same period was 29.62%. His funds now total 11.79 million yuan."
Zhang Qi looked over the data his assistant provided, which included detailed records of Fang Hong's trading activities.
"This sickle is really sharp," Zhang Qi said with a chuckle, expressing his admiration. "This kind of investor should be banned from the market! Let him keep going like this, and he'll make all the money in A-shares!"
Of course, the idea of banning him was a joke. Investors like Fang Hong were highly valued by brokers. Frequent short-term trades and growing capital meant more handling fees for brokerage firms.
Although handling fees and stamp duties had been significantly reduced, brokerage firms relied heavily on commission fees. At present, most brokerage firms charged a commission of around 1/1000 to 3/1000 of the transaction value.
For Fang Hong, whose account had been negotiated at a commission rate of 0.3%, his frequent trades meant he was generating substantial income for the brokerage. For instance, a single round of trading with 10 million yuan would incur a transaction cost of 70,000 yuan, not including the stamp duty.
How could a brokerage not love such a client?
In fact, Fang Hong could easily negotiate with Xinhong Securities to lower the handling fee to 0.5 per thousand. But he hadn't done so, choosing instead to "buy himself an insurance policy" by continuing with the current arrangement.
Fang Hong was well aware that his lack of background was his biggest vulnerability. Therefore, he was using his brains more than ever.
By not renegotiating the handling fee, Fang Hong ensured that the brokerage firm would remain loyal to him. If his funds increased to 100 million yuan, his commission fees could easily reach 700,000 yuan per day.
At such a high volume, the brokerage firm would make astronomical sums from his trades. This ensured that Fang Hong remained a highly valued customer for them.
Zhang Qi, aware of this, informed Hua Yongming, the head of Huayang Capital: "Keep an eye on this customer, but don't interfere with him. We don't need to recommend any products. The key is to make sure no one from the sales department leaks his activities to other firms. If anyone tries to poach him, get rid of them."
"Understood!" the assistant replied.
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