Kill Each Other Starting Now
"Grrraaahhh…."
People often say the three great human desires are hunger, sleep, and sex.
But surprisingly, the very concept lacks any solid academic backing.
Even so, if I had to rank them, I'd say it depends on the person's state.
"Yaaawn. In that sense, sleep feels absolutely essential right now…."
You can't exactly sleep when you never know when it'll blow up.
It's been a full 20 hours since I forced my caffeine-drooping eyelids open.
"Ugh, I'm beat."
I'd been staring holes into the charts for so long that my fatigued eyes needed just a moment's rest—I brought my hand up for a quick rub.
Twitch.
Shopity's stock, in a relentless downtrend, suddenly twitched upward ever so slightly.
"No way, right at this timing?"
Instantly maxing out my focus, I slammed the mouse onto the buy button.
At the same time, I posted the pre-written message to the gallery.
"No reactions yet."
A rebound so tiny it'd normally go unnoticed.
"But big events always start subtle."
1% or 2% upticks? Nothing happens.
Short sellers aren't idiots.
This is just noise. Sure, they're taking losses, but…
'Think top elites always win? Hell no.'
Far from it. Big funds treat losses like old pals.
"They even use them strategically to cut taxes, after all."
So they grit teeth through small hits.
The real issue comes next.
Tick. Tick. Tick.
Price started climbing like stairs.
The moment Shopity broke 5%, chaos hit the short balance window on my monitor.
"Gone?"
Someone couldn't weather the margin call.
You know, that thing I'd been harping on.
Still not clear?
"Hmm."
Forget the fund using leverage—think from the prime broker's side, the big investment bank lending 10x stocks or cash.
'Kinda weird if you think about it.'
Remember TRS (Total Return Swap) from before? Bank buys the stock to lend, right?
But shorts make price drop, so bank's holdings lose value. Why offer leverage?
Answer: Delta hedging.
'Fancy term, dead simple.'
Client shorts by borrowing shares? Broker shorts the same amount—theoretically, risk cancels to zero.
Hold 1M shares long, short 1M? Net zero. That's delta hedging—sensitivity to price moves hits zero.
Brokers profit on fees and cheap bank rates.
One catch where broker loses: Client goes bust and defaults.
"Exactly one case. When the borrower won't cover losses."
Bank can't do shit if they declare bankruptcy.
Enter collateral—margin.
As client losses grow, so does bank risk on default. So demand more margin.
That call saying 'Current collateral ain't enough—pony up maintenance margin'?
That's the margin call.
"If everyone could tank it, maybe different…."
But some fund overdid it, right?
Miss the deadline? Broker freezes account, grabs collateral, force-closes positions ASAP to cut losses.
Normally, match opposing trades to minimize impact.
But like I said—everyone's short-sided.
10 billion KRW in buys.
Peanuts on Wall Street.
"But nukes start with one neutron."
Price acceleration kicked off from that tiny buy.
Fuse lit once price rose and margin calls hit.
With market shares far below demand, only 60% can exit clean.
40%? Screwed.
"Then from now on… kill each other."
"…Float's too thin."
"I know."
"Scale back positions more?"
"How?"
"…."
The associate—who outranked analysts—knew the answer but had to ask. Low man's fate.
He shut up apologetically, but things weren't improving.
Worsening.
"…What now?"
"Recalc max reducible without market notice, and losses if it pops."
Junior trader piped up cluelessly.
"If it pops, no shares to buy—how value losses…?"
"You think I don't know?"
"…."
"Make it happen. Got it?"
PM muttered low, exiting the desk.
Plausible deniability mattered more than actual shares.
Traders frantically scanned order books.
"Ugh."
"How make numbers from nothing?"
"Quit bitching, aim for PM."
"Bids?"
"Gone."
Silence, then the same question.
Repeated endlessly within a minute.
"Bids?"
"Gone."
Order book empty.
One short covering dooms all.
Sell stealthily.
Everyone holding, but not forever.
"…Trillions on the line in chicken."
Right before double digits.
"Huh?"
"Don't jinx, heart's pounding."
"Buy orders?"
[Buy Execution: 260,000 shares]
[Buy Execution: 350,000 shares]
"Who dumped?!"
"Not us—someone else cracked."
Sighs all around.
"Shit, short squeeze."
"Too late."
Then it exploded.
Charts rocketed stepwise.
Phones erupted across the desk.
"Buy shares fast. Call every institution, shareholder!"
"Liquidate elsewhere for margin!"
"Yes, sorry, just a bit more time…."
…But if one fund gets liquidated?
Simple: Buys at market.
"Then?"
Price surges.
Other funds' losses balloon, margin calls hit.
Liquidated.
"Then?"
Price higher.
Another blows.
Wall Street calls this chain reaction the Death Spiral.
TL;DR…
Money printing.