BXBX NOVEL Chapter 51: Evil Practices
"Not exactly," I answered. "I look for events that could wake those stocks up and try to leverage the movement on them in the short term, using options for example."
Mark nodded. "You're playing the volatility without the heavy capital investment."
"Exactly."
"As long as your research on the companies is actually based on facts and is plausible, I can see how that can work," Mark said, leaning back in his chair. "But in my opinion, it's almost impossible to know which of the hundred small companies will actually succeed."
"The stocks that I have picked so far were massive successes in a month or two," I replied. "You can call it luck, but I do not believe it is."
'It's not luck; I'm not lying,' I thought. 'It's future sight.'
"News on MEDIFAST!!" All of a sudden, someone yelled from a station behind us.
Immediately, Mark's focus snapped to the TV at the front.
He clicked a few buttons on his keyboard. "Let me show you how I trade."
TAP!
A new position appeared on the left monitor.
(Long)[$MED][$7.91] {[10,000 shares]} {AVG Buy: $7.61} {G/L: +$3,000}
Another click.
(Long)[$MED][$8.93] {[20,000 shares]} {AVG Buy: $8.21} {G/L: +$14,400}
Then Mark sat there, focused and waiting.
Exactly 14 seconds later, he clicked another key.
(Short)[$MED][$10.49] {[10,000 shares]} {AVG Sell: $10.61} {G/L: +$1,200}
Then, almost immediately, one more click to get out of the long position.
[Shares Sell: $MED, Amount: 20,000, Average Price: $10.11] {G/L: +$38,000}
All this time, he didn't breathe even once.
Once he sold out of the position, he took a big breath and relaxed.
He turned to me slowly. "Do you understand what I just did?"
I nodded. "Yes. You scammed people out of money." I said matter-of-factly.
He laughed evilly. "Yes. You're right." He leaned back in his chair, clearly pleased with himself. "I wake up a stock after news with a big buy, then short the top and dump the shares. That's how you make money off of young, inexperienced traders."
"Yhym. I understand."
Mark smirked and continued, "You know, there are all these courses out there. If those people could actually make enough money with the strategies they teach, they wouldn't bother selling courses. They'd just keep making money themselves. But instead, they get other people to do what they're doing, ensuring that if they're first, they'll always make money."
He leaned forward, more animated now. "A few years ago, people organized pump-and-dumps through emails; now they use group chats. They mention stocks they've already accumulated long before. The VIPs in the room might make some money because newbies in the market, who aren't in the group, can still feed that stock by buying shares. But if the VIPs are a bit late, they won't make money either."
"But what follows is far darker," he paused. "False promises that the stock is actually a good investment keep traders holding onto the impulsive buy."
"They hold on until the stock reverse-splits, then reverse-splits again and again, until their 1000 shares at $10 turn into 10 shares at $0.02. Eventually, it gets delisted from NASDAQ and moves onto the OTC market. They lose 100% of their money."
I agreed and then asked, "Are you a specialist in these types of trades, or do you trade different stuff as well?"
"Oh no," Mark replied, shaking his head. "I actually prefer trading big stocks and indexes."
He clicked something on his keyboard to show me his trading strategy. "No crazy amount of indicators can help you make money. My approach is to stick to one good one."
He pointed at the screen. "I trade VWAP downtrend and uptrend bounces. I need to be very quick on the trades, taking small losses before I take the mother of all losses..."*
He then concluded, "The most important thing is to not get stuck in the stock. If you do, you can erase all your gains from the month just like that. It's about making money, not making the best trades."
He paused and added, "Although, in your case, I guess you're looking for the best trades."
"That's true," I replied. "But I don't buy pumped-up stocks. I buy the stocks that are already dead or barely alive but have been building a base and are not on a steep downtrend."
Mark looked at me inquisitively, "So, how good have you actually been doing? Not in terms of money amounts—I'm not that nosy—but percentage-wise."
"...I've made a few thousand percent over my initial investment."
He stared at me for a moment, his eyes widening. "What did you buy into?"
"For example, NetEase."
"Damn," Mark muttered, pulling up the stock's recent performance. "I traded that one before. It shot up massively, but I thought it dropped quite a bit afterward."
He checked the latest price. "Holy mother of all fucks. This stock looks strong. I guess the news wasn't just to pump it up. It's up 600%. Did you use options?"
"Yeah," I said. "I bought call options just a few weeks before their quarterly earnings announcement in August, and I'm still holding onto them."
"How did you know the earnings would be positive?"
"I looked into their stores, browsed through forum opinions, the number of players, and interest in their premium currency in their games," I explained.
Mark turned to Sam. "I don't know who is this guy that you brought to me today. But no trader here has insight like he does."
This comment drew some attention. "Hey Mark, watch your words!" one of the traders from across the room called out.
"Yeah, yeah, Tom, shut your ass up," Mark replied dismissively.
Tom shook his head, clearly unimpressed.
We spent some more time talking about various indicators and technical aspects of trading with Mark.
After a while Mark also got out of his short position making over $50,000 in the span of a few minutes.
He told me to drop by sometime, adding that it didn't feel like he was talking with a newbie but more like with a colleague.
I left the trading floor with Sam and we sat down on the sofas to drink coffee.
"So," Sam began, taking a sip of his coffee,"I'm sorry I did not tell you earlier, but I am actually the owner of this company."
Sam continued, explaining that while he wasn't ready to make any decisions at the moment, if he did extend an offer, it would be fair and based on equal grounds, not exploitative.
"For now, let's just stay in contact," he said.
"We have a group project. We will definitely stay in contact."
Twenty minutes later, we left the building, and Richard was waiting with the black Mercedes-Benz limousine.
As we walked up to the car, I spotted another black limousine parking a few dozen meters away, and I recognized the registration plates...
It was the car of a member of the Johnson family. Sam's brother, Doyle Johnson's, to be specific.
I had a bad feeling about this, but mentioning it would raise suspicions.
I slid into the back of Sam's limousine and we drove off to a high-end restaurant for lunch, courtesy of Sam.
After lunch, we returned to Gainesville.
...
Over the weekend, I had dinner with Chloe again.
Despite only a week of studying, she was already giving me the vibes of a dietetic, telling me what I should and shouldn't eat.
...
As expected, the topic "Oligopoly VS Perfect Competition" appeared in the microeconomics class, and everyone agreed that it's a great choice for our group.
Weeks passed as we prepared our project during classes and additional meetings, studied for National Economics tests, and got ready for our midterm exams scheduled for October 25th and 26th.
...
Four weeks went by quickly, and Friday, October 11, 2002, came around.
I was playing basketball on the court outside my dorm.