Reborn in America, I am a legendary short seller on Wall Street.

Chapter 3 The First Transaction

Larry frowned after hearing Logan's words.

It's important to understand that this isn't a future where cheap stocks are everywhere and dollars are flooding the market; this is the United States in 1891.

At the end of the 19th century, the US dollar was pegged to gold. One ounce of gold was officially priced at $20.67, which means that one dollar was equivalent to 1.5 grams of gold.

No wonder the Chinese of that era called the US dollar "US dollars".

Similarly, the purchasing power of the dollar under the gold standard was quite amazing at that time.

For example, $1 can buy about 5 pounds of beef or 5 pounds of sugar. In her previous life, Holari had less than 5 pounds of beef, enough to feed her family for a week.

Patent leather shoes made in Philadelphia sell for only $0.99 a pair in department stores.

When Larry was first reborn, he longed for Boston lobsters, which were worthless at the time, costing only 20 cents a small basket. White business owners would bring them to the lowest-paid Black laborers for lunch.

So, the impoverished Black brothers struggled to survive each day, eating Portland lobsters with long faces...

After receiving his first paycheck, Larry went to the docks and bought a huge basket of lobsters, which he ate until he vomited.

A stray dog ​​on the street sniffed the lobster Larry had spat out, then turned and walked away.

Of course, ordinary people's salaries were not high at that time. Larry was able to earn $5 a week because he worked in the financial industry and was literate and had a good memory. This was just the lowest level of copying work in a securities company, and he was not even considered a formal employee.

Even skilled workers and technicians living in the basements of slums earn only $4 to $8 a week. This amount is used to support a family. A quarter of their salary goes to rent and another quarter to food, leaving them with very little money at the end of the month.

When the red-haired Logan said he wanted to do stock trading, Larry didn't believe him at all, because at Paine Webber Securities, the clients who came here to "take a gamble" were all wealthy gentlemen.

They spend hundreds or thousands of dollars on a single transaction.

A single loss could be enough to hire a coachman in a sharp suit to drive their carriage for a week.

Larry only has $4 in his pocket right now!

Still buying stocks?

Red-haired Logan noticed Larry's hesitation and lowered his voice, saying, "Idiot, of course we won't be doing this through our company! Ever heard of a 'betting bank'?"

Larry shook his head. "Never heard of it!"

Logan looked around, then reached out and grabbed Larry. "Come with me!"

The two walked out of the company gate, turned two streets, and then went into a narrow street where there was a company without a storefront.

Larry went inside and discovered that it was also a stock exchange, albeit a much more rudimentary one.

On the wall at the far end of the room, there was also a price list, but it had far fewer stocks, covering only most of the popular ones.

Logan pointed behind the counter, “Here, we can trade a minimum of 5 shares. For example, the current price of Barrington is…” Logan said, looking at the blackboard.

Larry replied without hesitation, "Five and a quarter dollars."

Logan also saw the price of Barrington stock at this time, and it really was $5 and a quarter, just as Larry had said.

"Yes! One share is $5 and a quarter. Five shares is..."

“26 and a quarter dollars!” Larry answered first.

"Yes! We'll put $5 as margin, and we'll buy as many shares as they tell us to buy. We'll buy now, and sell later if the price goes up!"

After Logan finished speaking, Larry began to make his own calculations.

He knew about the margin system, but the margin was usually half or a quarter of the total stock price. Even if the two of them pooled together $6, it wouldn't be enough to buy stocks!

Larry voiced his doubts, but Logan waved his hand, "Idiot, that's not how it works! Here's the rule: if you get a margin of $1 per share, then suppose Barrington's stock price drops from $5.55 to $4.55, wiping out that $1 of margin, your $1 is gone, vanished into thin air!"

Larry was stunned for a moment, then he understood. This system was more like futures trading in his previous life. You would use a thousand dollars to buy ten thousand dollars worth of futures, and if you lost money, you would lose your thousand dollars first.

After losing all the money, my futures account was liquidated, and I couldn't get a single penny back.

Logan waited for Larry to process the information he had just received, then continued, "But what if Barrington stock goes up? Let's say it goes from $5 and a quarter to $6 and a quarter, then you can make $5 with your $5 investment, doubling your money! Do you understand what I mean?"

Larry's eyes narrowed upon hearing this, but he didn't seem too concerned about doubling his principal.

However, based on his understanding of Barrington stock, its price is indeed on the verge of a breakout.

Larry quickly pulled his notebook from his shirt pocket and flipped to the line recording the quote for Barrington's stock...

5.2美元、5.15美元、5.2美元、5.2美元、5.25美元、5.25美元……

This long account spanned three days.

In Larry's view, this was indeed in line with his usual prediction that stock prices were about to rise.

Larry looked up and glanced at Logan.

Both believed that Brorington's stock price would rise, but Logan's reasoning was "insider information," while Larry relied on "technical analysis."

“Done!” Larry nodded and pulled the $4 out of his pocket.

Logan was pleased and pulled out a five-dollar green bill from his pocket.

The two of them pooled together $9 and bought 9 shares, with a margin of $1 per share.

However, the betting company will charge an additional 50 cents commission for both people.

The two men rummaged around and each found a 25-cent coin, which they handed to the gambling house employee.

The employee, holding two coins, glanced at the two men and gave them a disdainful smile.

He then took a large sheet of paper, registered the names of the two people, the names of the stocks purchased, and the time of purchase. He glanced at the prices on the price chart before carefully filling in the information.

"Buy 9 shares at $5 and a quarter of a dollar. Margin of $1 per share."

The paper was then handed back to Logan and Larry.

It was the first time Larry had ever seen his own trading statement. The two of them retreated to the seats at the entrance of the trading hall and kept looking at the trading statement.

Larry thought back to his past life, and stock trading seemed to be just numbers on a computer screen, something he felt no sense at all.

But in this life after being reborn, I'm only 14 years old, and I've already bought stocks. How amazing!
"Will they actually help us buy stocks?" Larry turned to ask Logan.

Logan gave Larry a look that said, "You don't know anything, kid," and then lowered his voice to patiently explain.
"Do you know why they're called betting companies? It's because they don't actually buy stocks; they bet against you! If you make money, they pay you back; if you lose money, the money you lose is theirs."

hiss!
Larry gasped, instantly understanding.

In my past life, I've seen many similar scams, such as cryptocurrency speculation, tea speculation, and gold speculation. In reality, the big players don't actually have any goods; they're just betting against you, betting that you'll definitely lose in the future, and then they pocket all your deposit.

If you're lucky and win money, don't worry, they can simply run away with the money...

Anyway, the money won't end up in your hands!
This kind of scam was actually rampant in the United States as early as 1891!

Thinking a bit further, Larry realized that Ponzi schemes also originated in the United States.

There are countless similar tricks, but regardless of the past or present, these scams all share the same industry term – "innovation"!
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(End of this chapter)