Chapter 231: Gears
Kang Tae-joon’s feed, once silent, was now alive with his followers’ voices.
└ Seven days until relaunch, let’s go!
└ Told you so! I said Kang Tae-joon would never let us down.
└ ㅋㅋㅋㅋ Shorts are screwed. Brace yourselves. Once you’re caught short, there’s no way out.
└ For real. Longs can at least hold on. Shorts have no choice but to cut losses.
└ And the short-selling forces must be feeling the chill now.
└ Short squeeze, let’s go!
└ Wipe out those short-selling bastards.
└ ㅋㅋㅋㅋ The stock’s rising at an insane pace.
DJ Capital’s Strategy Operations Room.
Eight oversized screens, switched to dark mode, displayed
“Current stock price?”
In response to Grant’s question, Lisa moved the mouse to bring up the quote window.
【DJFT: $15.55 ▼-12.3%】
“It rose to 103% after yesterday’s successful return, but there’s been some pullback. Still, the downside support is rock-solid.”
“Not looking like it’ll break easily?”
“Right.”
“Okay, let’s check our status first.”
Lisa brought up a pre-prepared panel.
[Position Status (Spot Basis)]
- DJ Capital: 123 million shares
· Average Cost: $12.23
· ROI: +27.2%
- Trinity Holdings: 142 million shares
· Average Cost: $13.15
· ROI: +18.3%
- Northbridge Capital: 35 million shares
· Average Cost: $10.87
· ROI: +43.1%
- Bluehaven Ventures: 29 million shares
· Average Cost:…….
· ROI:…….
-…….
Grant scanned the panel’s numbers with awe.
Just a day ago, the charts had been worrying about liquidation.
Now they were soaring sky-high, deep in the green.
“Show me the other metrics.”
This time, Lisa brought up four graphs simultaneously.
-
Utilization: 94% → 96.8% surge
-
CTB: 23% → 47%
-
FTD: +32% from previous day
-
Days to Cover: 5.6 days → 6.9 days
“96.8% of the float already used for short-selling means… there’s no borrowed stock left in the market.”
“The CTB spiking nearly twofold is because of that. FTDs, failing to return stocks by the set date, are also steadily rising.”
“The short-selling forces must be shitting their pants right about now.”
Grant snapped his fingers at the screen in agreement.
“At this rate, we could see large-scale forced liquidations soon.”
Sure enough,
at that very moment, the system alarm blared, and a new panel refreshed.
[Warning: Buy-In Imminent - 13 Positions]
[Multiple Stocks Exceeding CTB 80%]
“Looks like the brokers are starting to pressure for redemption.”
“Hahaha, with demand surging, borrowed stock drying up, and forced Buy-Ins starting, the shorts are headed for bankruptcy.”
The stock, which had momentarily stalled with the warning, shot back up.
【DJFT: $15.81 ▼-10.83%】
【DJFT: $16.03 ▼-9.59%】
【DJFT: $16.23 ▼-8.46%】
【DJFT: $16.60 ▼-6.37%】
【DJFT: $16.80 ▼-5.25%】
“Once the stock crosses this level, the option sellers’ hedge volume will start to follow.”
“So the dealers will start buying stocks too?”
Lisa nodded.
The so-called ‘Negative Gamma’ zone.
The higher the stock rose, the more stocks the dealers had to buy to avoid losses.
And those buys would drive the stock even higher.
“The options market’s heating up too.”
Lisa manipulated the mouse to switch the screen to another panel.
[Options Market Volume]
-
Call Volume: +342%
-
ATM Hedge Volume: 46 million shares
-
Estimated Dealer Hedge Strengthening Zone: $17.7~$19.0
Call option volume was exploding.
Accordingly, dealers were frantically buying stocks to hedge.
“From now on, it’ll be buys triggering more buys.”
Before Grant could finish speaking, the stock shot up again.
【DJFT: $16.80 ▼-5.25%】
【DJFT: $17.22 ▼-2.87%】
【DJFT: $17.73 ▲+0.00%】
【DJFT: $18.12 ▲+2.20%】
The stock, which had fallen as low as -12%, turned positive in just half a day.
It was clearly gaining momentum in the upward trend.
“At this rate, we could recover the previous high of $23 within a week.”
Lisa smiled.
The short-selling forces were covering their shorts.
Dealers were buying spot to hedge.
But the float left in the market was already depleted.
The door to a true short squeeze was opening.
Grant spoke firmly.
“Volatility’s only just starting. This is just the warm-up.”
＊＊＊
Lower Manhattan Midtown, Golden Edge.
Sharp, short alarm tones rang out from the wall speakers.
A large matte-black screen flashed red banners, spewing warnings.
[Prime Alert]
AlphaPrime – Margin Requirement Increased (Haircut +10%), 7 T+0 Forced Buy-In Candidates.
[Locate Desk]
- Hard-to-Borrow Inventory ‘ZERO’, All New Borrowing Suspended.
[Recall]
- Three Custodians, ‘Borrowing Unavailable’ Fully Notified.
Sara Morgan twisted her headset, reporting.
“Prime’s sent a list that must be redeemed before today’s market close.”
[Cover 28 Million Shares Immediately!]
Lionel’s brow furrowed deeply at the number.
“Route it to another broker first. MetaPrime, CentralPrime, whoever. I don’t care what the CTB is. Just grab whatever you can.”
Vincent Crow shook his head.
“……They’re all at ‘Zero’ inventory. Even the long-only anchors have gone into full recall mode.”
Even the long-only funds, which didn’t short, only held long positions, had judged the situation as completely reversed.
They declared no more borrowing.
Meanwhile, the numbers on the ticker jumped up again.
【DJFT: $18.19 ▲1.1%】
【DJFT: $18.69 ▲3.89%】
【DJFT: $18.97 ▲5.44%】
【DJFT: $19.32 ▲7.39%】
Sara brought up the options panel next.
“Call volume +430%, estimated dealer hedge 50 million shares exceeded. Fully entered the Negative Gamma zone……”
Lionel grit his teeth.
“Then we’ll press hard with synthetic shorts. Sell high ITM calls + buy puts.”
“But…… the spread’s widened threefold now, the risk’s too high.”
With option liquidity providers retreating, the bid-ask spread had widened sharply.
Entering aggressively here could lead to even bigger losses.
“Damn it……”
Lionel finally cursed.
“What’s the situation elsewhere?”
Golden Edge wasn’t the only one shorting Dojin Frontier.
Countless hedge funds following them were sinking into the same quagmire.
Sigma Capital Risk Room.
Beyond the glass wall, phones rang simultaneously, and the warning lights on the screens flashed incessantly.
[Risk]
· VaR Exceeded 2.6x
· Delta Forced Reduction from -6.1 → -2.4
[Prime]
· Recall Executed 11.5 Million Shares
· CTB Increase 81%
[Clearing]
· 3 Accounts Delayed Settlement → FTD Close-Out Pending.
CIO Matthew slammed the desk.
“How much more do we have to buy to finish redeeming?”
The quant team leader, pale-faced, answered.
“Market price basis…… 130 million more shares needed. But there are no shares to buy.”
Over 97% of the float was already tied up in positions.
Even if they wanted to buy, they couldn’t.
And then Sigma Capital’s risk management algorithm kicked in.
Another gap in the order book vanished.
【DJFT: $19.40 ▲+7.78%】
【DJFT: $20.03 ▲+11.28%】
Delaware Partners, Swap Desk.
The Total Return Swap (TRS) alarm lit up red.
[PB Swap]
· Margin Call Unmet → Trigger Activated
· Swap Unwind Initiated
· Prime Forced Spot Buying Initiated
Strategic Operations Head Ethan Brooks let out a bitter laugh.
“Swap Unwind…… Whether we buy or Prime buys, ‘spot buying’ is unavoidable.”
The swap desk trader, pale-faced, recited the numbers.
“For 4 TRS margin call unmet accounts, Prime’s abandoned all vega and delta, entering forced hedge with the underlying. Estimated execution…… 19 million shares.”
“Goddamn it…… This is like us biting our own tails.”
Regardless of Ethan’s twisted expression, the monitor’s top bar spewed execution alerts continuously.
【DJFT: $20.47 ▲+13.37%】
【Trading Halt (LULD) Triggered — 5-Minute Halt】
The mention of the LULD trigger silenced the desk.
The trading halt system, activated when the stock price exceeded the designated range.
It had been happening repeatedly for days.
Then warnings and messages flashed on the screen again.
[Clearing]
· 22 Accounts at Risk of Settlement Failure - FTD Close-Out to be Executed
[Prime]
· Buy-In Execution Notified - Total 9.5 Million Shares.
Ethan twisted his earpiece, shouting at the Prime broker.
“There are no shares in the market. Slow down the executions!”
But the response was a dry one-liner.
“We’re not suppliers. We merely…… fulfill settlement obligations.”
As soon as the halt lifted, execution sounds poured like rain.
【DJFT: $21.18 ▲+17.24%】
【Options: ATM Call Delta +0.18p Spike, Hedge Demand +23 Million Shares】
The options board lit up white.
The delta on the strikes above the ATM calls exploded instantly, triggering dealers’ ‘forced buying.’
The cogs of Negative Gamma meshed fully, beginning to turn in earnest.