103: Turning the tide

In Changsha, at the New Port Industrial Zone Headquarters, the aroma of food wafted through the simple prefabricated house.

Lu Fan was chatting with Tang Jifeng about the progress of the industrial zone while eating, with a recently delivered copy of the Shen Bao spread out on the table.

Lu Fan's gaze swept over the financial section, and a bold headline instantly caught his eye.

"Shanghai Cotton Futures Turmoil Rises Again! japanese inflate cotton prices, shorts in crisis!"

His heart skipped a beat, and he immediately grabbed the newspaper for a closer look.

The report detailed the recent abnormal fluctuations in cotton futures.

Led by the Youxin Foreign Firm, japanese commercial firms were using their massive capital to continuously go long.

They pushed futures prices to absurdly high levels, far exceeding spot prices, and the bulls were acting with extreme arrogance.

Under the full-scale siege by the japanese, the Chinese merchants who were shorting were in a precarious position, facing the risk of liquidation.

And one of the main short sellers was none other than Chen Liting!

"Oh no!" Lu Fan slammed down his chopsticks, his expression changing drastically.

He instantly remembered a fatal oversight.

Before leaving Shanghai to fully commit to disaster relief, he had forgotten to formally transfer those 5,000 tons of spot cotton to Chen Liting.

Without this decisive spot stock in hand, Chen Liting's fight against the Youxin Foreign Firm's capital strangulation in the futures market...

...was no different from using rifles against tanks.

"Old Fourth, there's an emergency in Shanghai. I have to go back immediately."

Lu Fan didn't have time to explain further; he grabbed his coat and rushed out.

Tang Jifeng watched his retreating back, then looked at the newspaper, lost in thought.

A day later, at the Magic City Futures Exchange.

The trading hall was bustling with noise, the atmosphere as tense as a powder keg about to explode.

On the massive blackboard, the price of cotton futures was still being updated to new highs by the floor traders in Red Jackets.

Every tick triggered a wave of gasps or laments.

Standing by the second-floor railing was an arrogant japanese man in a kimono.

This person was the young master of the Youxin Foreign Firm, Abu Fujita.

Surrounded by a group of japanese merchants and Chinese compradors, he looked down with smug satisfaction at the battlefield he controlled with his capital.

Greed and the light of total control flickered in his eyes, giving him an insufferable air of superiority.

Meanwhile, in a corner of the hall, Chen Liting's face was ashen, his clenched knuckles turning white.

The phone in front of him rang incessantly; they were all notices from the brokerage firm urging for more margin.

Although he had a comprehensive plan and held five million US dollars and 4,000 tons of spot cotton provided by Lu Fan...

...the scale of the capital pool behind Abu Fujita far exceeded his estimates.

Even worse, on his own side, Traitor lackeys had emerged, suddenly defecting and leaking the entire plan.

Under the relentless short squeeze by the Youxin Foreign Firm and the repeated margin calls, his situation was teetering on the brink.

Sweat soaked his shirt; without those 5,000 tons of spot stock to anchor him...

...he felt like a small boat in a storm, liable to capsize at any moment.

Just then, there was a small commotion at the entrance of the trading hall.

A foreigner wearing a well-tailored British pinstripe suit and gold-rimmed glasses walked in.

He was tall, with typical Europe features—a high nose, deep-set eyes, and a sharp, calm gaze.

Speaking in English with a thick Eagle Sauce accent, he showed his credentials to the senior broker who came forward.

"Louis Scola, an Eagle Sauce cotton merchant.

This is my first visit; I'd like to learn about your exchange's cotton futures."

The broker didn't dare be negligent and immediately led him to a VIP seat.

Louis Scola didn't waste time on pleasantries; his gaze locked directly onto the frantically jumping cotton futures prices on the blackboard.

He glanced at the overwhelmed Chen Liting in the corner and then at the smug Abu Fujita on the second floor.

A faint, almost imperceptible cold smile played at the corners of his mouth.

He observed quietly for about half an hour, watching the bulls of the Youxin Foreign Firm continue to push prices higher with massive buy orders.

The short-selling local Shanghai merchants, including Chen Liting, were retreating steadily, barely able to defend themselves.

The two groups clashed frequently throughout the morning, until finally, an hour and a half before the morning close.

As the price of cotton was hyped up another notch, the futures market was directly detonated.

Because the short side had already been pushed to the edge of the cliff.

Just one more price increase, and they would become roasted sheep served on the table, starting a gluttonous feast.

At this critical juncture, Scola called over the broker.

His voice was calm and steady, yet carried an unquestionable authority: "Immediately register 5,000 tons of cotton spot warehouse receipts for me.

Quality: Grade One American Cotton. Warehouse: Pudong No. 3 Public Bonded Warehouse. Process the paperwork immediately."

The broker thought he had misheard: "Five... five thousand tons? Grade One American Cotton? Sir, are you sure you want to register warehouse receipts?"

Registering warehouse receipts meant that these spot goods would enter the exchange's delivery system and could be used for physical delivery.

"I'm sure! Now!" Louis Scola's tone was brook no argument.

The broker didn't dare delay and immediately ran to handle it.

News of such a massive amount of high-quality spot stock suddenly being registered as warehouse receipts...

...was like dropping cold water into boiling oil, instantly exploding within a small circle inside the exchange.

However, an even bigger shock was yet to come.

Within the few minutes after the warehouse receipt registration was confirmed internally by the exchange but not yet fully publicized.

Louis Scola issued another instruction to the broker, his voice clear and loud, even drowning out some of the hall's clamor:

"At the current market price, sell cotton futures,

Contract month: Main contract.

Quantity: 2,000 lots!"

"What?" The broker was completely stunned. Each lot represented 5 tons of cotton, meaning 10,000 tons of futures.

He just registered 5,000 tons of spot stock and turned around to short 10,000 tons of futures?

This operation was unheard of!

"Execute it immediately!" Louis Scola's voice carried a cold pressure.

With trembling hands, the broker relayed the instruction to the floor traders.

Almost simultaneously.

On the exchange's bulletin board, a message capable of changing the course of the battle scrolled by:

"Latest Registered Warehouse Receipt: Cotton (Grade One American Cotton), 5,000 tons, Warehouse: Pudong No. 3 Public Bonded Warehouse. Owner: Louis Scola."

"Boom!!—"

This information exploded in the trading hall like a clap of thunder.

Everyone saw it: 5,000 tons.

Solid, Grade One American Cotton spot stock, right there in a Pudong warehouse, owned by an unfamiliar foreign merchant.

Before anyone could recover from the shock of this massive spot stock, the floor traders had already received their instructions.

They began to short frantically at the current high prices, and massive sell orders poured down like a waterfall.

"Sell orders! Massive sell orders!"

"Someone is shorting! A huge short position!"

"It's that Louis Scola. He just registered spot stock and then went short."

Panic spread instantly like a plague.

Because the logic was incredibly clear:

What did it mean for this Louis Scola, who held a massive amount of cotton spot stock, to choose to short heavily when futures prices were artificially high?

It meant he believed the spot price would crash!

It meant he had plenty of spot stock ready for delivery!

It meant he was bearish on the future market to the extreme!

The currently forced-up cotton price was, to put it bluntly, a lie.

And lies are powerless in the face of facts.

"Spot stock! He has spot stock! 5,000 tons! Grade One American Cotton!"

"Run! The spot market is going to collapse!"

"The bulls are finished! Close your positions, fast!"