Chapter 5: Take Profits
In a flash, the stock price shot up to 124.58 RMB, hitting the upper limit and getting locked in.
The buy orders surged, with 1.25 million shares queued up to buy, a reassuring figure.
“Brother Liang, that’s incredible. I underestimated you.” Zhao Haisheng couldn’t help but give him a thumbs up, clearly astonished.
It was safe to say that the funds they’d provided for Lu Liang’s margin account had already skyrocketed to 830,000 RMB.
“Oh, co on, it’s just luck,” Lu Liang said, patting Zhao on the shoulder. “I’ll leave you to your work.”
Over the next four trading days, Baofeng Technology solidified its title as the “demon king” stock. While it didn’t close with perfectly uniform price limits, it gained between 7-10% daily.
Soon, a new week began, and Baofeng Technology’s share price reached 224.4 RMB.
“The stock’s likely switching players at these high levels,” Lu Liang murmured, sipping his coffee. Each day, he tracked the market to observe movents and gain experience.
With only three days left, he was just two price limits away from achieving the “40 days with 37 limits” milestone.
The peak of 327 RMB was drawing closer.
On this particular day, Baofeng Technology displayed its trademark volatility, playing a “high to low” move. It surged by 10% in the morning, hit its upper limit, then broke down and hit the lower limit by the end of the trading day.
Everywhere—forums, social dia, and other platforms—was filled with gloomy ssages from doubters and those swept up in the sentint.
Posts blared, “The demon king has fallen!”
“The players behind this stock really know how to manipulate!” Lu Liang smirked, unfazed by the rumors.
He knew that based on his information, the next two days would bring two more price limits.
From this, he inferred that today’s up-and-down movent was a ploy to shake confidence, allowing the players to prepare for one final surge and to entice retail investors to take over.
According to his research, 38 institutions had entered Baofeng Technology during this period—likely even more in reality.
For these institutions to secure their profits and exit, they needed a large influx of retail investors to buy in.
Continuously pushing up the price would only make retail investors wary and hesitant. But an apparent loss, followed by recovery, would create a tantalizing allure. The final 30% profit margin was essentially their “death al” invitation.
Those who could sense this would escape with their gains; those who couldn’t would beco the next wave of retail buyers left holding the bag.
“Ti for a new book,” Lu Liang muttered, finishing his read of *Basics of Financial Markets and Institutions*. He didn’t delve further into financial knowledge.
Understanding the market to its fullest didn’t matter—markets ultimately served as tools for people. Better to study the forces that moved them.
As predicted, the next two days saw the stock rise with two more price limits.
The stock price soared to 274.52 RMB, leaving only a 19% gap to reach 327 RMB.
On Thursday, May 21,
Baofeng Technology was three days away from its two-month listing anniversary.
That day, market sentint was electric.
At 10:30 a.m., just an hour into trading, the turnover rate reached 52%, with a trading volu breaking 3 billion RMB.
The price movents were erratic, rising by five or six points one mont, dropping by four or five the next—an unpredictable pattern.
Yet, after the previous “high to low” move, which was followed by two limit-ups, retail investors’ confidence was already bolstered.
And with Baofeng Technology labeled as an “Internet ” company, its market value had just reached 40 billion RMB.
Experts from all corners declared it the “YouTube of China,” with claims that its market cap could reach hundreds of billions, and its stock price, thousands. ɌἈ₦ȱ𝔟Εṣ
With the A-shares index breaking 4,500 points, the frenzy reached new heights. Analysts were practically telling people to dive in with their eyes closed.
Swayed by the hype, retail investors lost their sense of independent thought, like sheep in a herd.
“If I didn’t know the future, would I be like them?” Lu Liang pondered, his expression darkening as he realized he probably would be.
Caught in the market, it’s hard to see the ga at play. Greed is boundless; once you have a gain, you always want more.
With that thought, Lu Liang decided not to be too greedy. Around the 310 RMB mark, he began gradually selling his 34,000 shares in small chunks.
Once he cleared his personal account, he logged into the margin account provided by his brokerage.
There, he sold 6,600 shares all at once.
In the frenzied market, selling 40,000 shares was like dropping a pebble into the ocean—not even a ripple.
“Personal account: 10.54 million RMB. Margin account: 2.046 million RMB. After miscellaneous fees and including principal, my balance is 12.066 million.”
Lu Liang felt a bit dazed. Two months ago, he’d sold his house with barely over a hundred thousand in liquid funds; even with maxed-out credit, he’d only managed to pull together about 600,000 RMB.
Now, he was a multimillionaire.
Taking a deep breath, he fought back excitent and called Zhao Haisheng. “Haisheng, can you close out my margin account?”
Zhao was stunned, and after checking the system, saw that Lu Liang had indeed sold everything. “Brother Liang, we’ll still have to charge you for the full month’s fees, even if it hasn’t been a month.”
“Not a problem. Go ahead and deduct it.”
“Then, Brother Liang, if you’re free this afternoon, co by the office to sign the settlent agreent.”
At 2:00 p.m., Lu Liang returned to the Guotai office. It was bustling as always, with a constant stream of people opening accounts.
That morning, the index had broken through 4,500 points, sparking a nationwide stock market craze. Older investors nostalgically recalled the early ’90s, with trading fever reaching a peak.
Investing had beco a new trend.
Lu Liang was shown to the VIP room, where he observed the fervent crowd below, a strange glint in his eyes.
He had been trying to view things from the perspective of a “player,” realizing that the people below were like lush fields of “chives” waiting to be harvested.
“It’s close to the peak, I think,” he mused. Finance was not the backbone of China’s economy—real estate was.
As Zhao printed out the agreent, he smiled and asked, “Brother Liang, did you get a tip?”
“What tip would I get? It’s just that market sentint is too intense. I don’t want to get caught in it,” Lu Liang joked.
“Yeah, maybe it’s ti for people to cool off a bit.”
Zhao politely refrained from probing further.
Glancing at the market chart on the wall, he noted that Baofeng Technology was up 7.55% and seed on track for another upper limit.
Unable to hide his own smile, Zhao, a seasoned market player, wasn’t about to miss out on this opportunity.
To him, Lu Liang’s caution seed overly conservative. With the index heading toward 5,000, it was hard to imagine stocks would drop.
Then again, Lu Liang had already made enough, so cashing out wasn’t unusual.
“D*mn it, I sold too early,” Lu Liang muttered with a look of regret.
Zhao tried to console him. “Brother Liang, locking in profits early isn’t a bad thing.”
Lu Liang sighed. “Who wouldn’t want more money?”
Zhao only smiled, pulling out the agreent. “Here’s the final balance—1.536 million RMB.”
Lu Liang reviewed it carefully and signed his na.
Zhao added, “Your funds will be in your account within two hours. Please check it later.”
“We recently launched a mixed fund. It’s up 25% over the past month—interested in learning more?”
Zhao didn’t know exactly how much Lu Liang had made with his 68 slots, but conservatively estimated it to be over 6 million RMB.
That ant Lu Liang now had at least 7.5 million RMB in liquid funds. If he invested just a million, Zhao would get a 15,000 RMB commission.
“I’m planning to take a break. Watching the market every day has my heart racing. I haven’t slept well in ages.”
Lu Liang deflected with a laugh. Funds, in his view, went up less than stocks but fell more sharply.
Moreover, most funds made their money not from market investnts but from generating transaction fees, guaranteeing profits in any market.
As for clients, they were given a simple “investnts are risky” disclair.
If there was a profit, it was solely due to favorable market conditions, with no connection to the fund managers’ decisions.
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