Counterattack starts with controlling probability

"That's right," Professor Hall nodded. "What's worse is that this behavior is being accelerated by quantitative investing and AI algorithms. The transparency of capital flows is almost zero, and the goals of these manipulators go far beyond simple market profit."

Li Hao's brows furrowed tighter and tighter.

He realized that this was not only a market problem, but also a financial game across national borders.

This time, the enemy may be far more secretive and dangerous than Godma.

"Li, this is also a rare opportunity. If we can figure out how to balance the free flow of capital and market stability, it will not only enhance our academic achievements but may also bring about practical changes to the global capital market."

Professor Hall looked at him seriously.

"This would be groundbreaking research, what do you think?"

Li Hao closed the report and remained silent for a long time.

He knew in his heart that the difficulty of this time was far beyond his imagination.

Cross-border capital flows involve not only finance, but also multiple factors such as politics, economy and technology. The hidden conflicts of interest in these issues are full of unknown risks.

"Professor," he finally spoke, his tone firm but with a hint of caution, "I need some time to digest this information, but I can assure you that if I take on this project, it will be the most complex battle I have ever faced."

Hall smiled and nodded gently. "Complexity is what gives value. Li, our opponents this time are not only more deeply hidden, but their goals may be far more dangerous than we imagined."

Li Hao nodded silently, but he had already made up his mind.

"I will definitely meet this challenge head-on."

……

The next day, Li Hao sat at his desk, the light casting the shadow of the report on the wall.

He flipped through a thick stack of documents, and the major issue Professor Hall had recently mentioned gradually emerged in his mind - cross-border capital flows and market instability.

Every piece of data and case in the report was like a nail piercing his nerves.

"These people are so ruthless and daring," he muttered, turning to a page marked "Emerging Market Case Analysis", his eyes instantly becoming serious.

In this case, an emerging market attracted a large amount of international capital thanks to the rapid growth of its technology industry.

At first, these capitals seemed to be coming to invest and help development, and everything seemed calm on the surface.

However, things are far from that simple.

"Once capital smells money, it is often more ferocious than a pack of wolves." Li Hao remembered the professor's words and continued reading.

After foreign capital entered the market, it quietly raised the prices of technology stocks through dispersed accounts.

In just a few months, the stock price soared like a rocket. Many local investors were excited and flocked into the market in an attempt to catch this "wealth train".

However, all this was a premeditated trap.

When local investors began to frantically chase high prices, foreign capital had already secretly liquidated its positions at high levels, and at the same time used hedging tools to short these technology stocks on a large scale.

"It's really a bloodless killing." Li Hao whispered, thinking of those ordinary investors who dreamed of getting rich and probably didn't even have the chance to stop their losses at this time.

What followed was like a disaster movie—stock prices plummeted and market confidence collapsed in an instant.

Local retail investors sold their shares and fled, but this was not enough to fill the deep pit created by this capital plunder.

These foreign investors not only profit from the stock market, but also make a fortune through the currency market: they take advantage of capital outflows during market panic, depress local currency exchange rates, and then reap huge profits from exchange rate fluctuations.

Li Hao closed the report, and in his mind he seemed to see thousands of families losing everything overnight because of this financial crisis.

"These operations completely take advantage of the lack of supervision in emerging markets," Li Hao said in a low voice.

He is well aware that while emerging markets attract foreign investment, they often provide opportunities for speculative capital due to imperfect regulatory systems.

"Information asymmetry, imperfect rules, and investors' blind optimism make it a paradise for capital." Li Hao quickly sorted out several key points in his mind.

First, these foreign investors took advantage of the untimely disclosure of information in emerging markets.

They used decentralized accounts and complex fund flows to hide their intentions so well that even local regulators could not detect them.

Secondly, there is the two-way operation of currency.

These capitals not only arbitrage from the stock market, but also make double profits by shorting the local currency.

This cross-market linkage makes regulators even more helpless.

Finally, there is the assist of AI and quantitative investment.

The speed of high-frequency trading and the hidden nature of complex algorithms allow these capitals to manipulate the market more accurately and quickly than traditional speculators.

They manipulate market prices like puppets, and investors don't even have time to react.

The final section of the report details the consequences of this capital plunder:

Corporate financing is cut off, bank bad debt rates are soaring, and investor confidence is collapsing...

The financial systems of emerging markets were almost paralyzed.

The deeper problem is the chain reaction triggered by this storm: the real economy has been damaged, the employment rate has plummeted, and it has even further threatened social stability.

"These people are not investing at all, but sucking the marrow out of our bones!" Li Hao tapped the table with his fingers, a hint of anger flashing in his eyes.

He leaned back in his chair, closed his eyes, and thought quickly in his mind.

"Regulation is clearly not enough," he whispered. "If these people can manipulate the market with algorithms and market intelligence, can't we use the same methods to counter them?"

An idea quickly formed in his mind: If the flow of capital could be predicted in advance through AI algorithms and a response mechanism could be built, it would be possible to dismantle them before they stir up a storm.

However, he also knew that this was not an easy task.

To achieve this, not only powerful technology is needed, but also sufficient market data and close cooperation with local regulators and capital forces.

"This is really a tough challenge." Li Hao took a deep breath, stood up and walked to the window.

The afterglow of the setting sun fell on the lawn of the campus, and his shadow was stretched out very long.

As expected, Daxia's financial market, with its continuous development and the increase in participants, has also been affected and impacted in a similar way.

The night in Berkeley was quiet and cool. Li Hao sat at the desk in his dormitory, and real-time data of the Daxia stock market kept flashing on the computer screen.

The sharp fluctuations in the prices of certain technology stocks and leading companies in emerging industries clearly show the manipulation of hidden financial groups.

Although he was in the United States, Li Hao never relaxed his attention on the Daxia market.

Hidden funds are using complex capital means to manipulate the market, trying to buy low by lowering the prices of high-quality assets, which makes Li Hao extremely uneasy.

Li Hao convened the core members of New Star Investment and analyzed the current market trends in detail through video conference.

"This time, the financial group's methods are very covert, but the essence of their operations is still to amplify profits through high leverage and the derivatives market." Li Hao pointed the mouse at the data chart on the shared screen. "If we can intervene at their key operating points, we can directly disrupt their plans."

"Brother Hao, do you mean that we don't take the traditional hedging route, but instead fight back directly from the derivatives market?" Chen Kai asked.

"That's right." Li Hao nodded. "These financial groups rely on derivatives markets like options and futures to conduct highly leveraged operations, using small amounts of capital to leverage huge market fluctuations. If we can accurately lock in their positions, we can use reverse transactions to negate their leverage and even trigger forced liquidation."

Xu Lei showed a hint of surprise: "But, it's almost impossible to find their specific operation point."

Li Hao pondered for a moment, then raised the corner of his mouth slightly: "Others may not be able to find it, but I can."

After Li Hao closed the meeting, he sat at his desk and began to analyze in depth.

Lao Pi's voice echoed in his mind.

The market is made up of countless possibilities, and we need to find the most critical path.

He used Lao Pi's ability to quickly deduce the possible market trends through large amounts of data analysis and constructed a complex probability network.

Every deduction brought him one step closer to the truth.

In the end, he found the key layout point of the secretive financial group in the derivatives market: the deeply out-of-the-money options of a certain technology stock.

Li Hao realized that these options were leverage tools used by financial groups to manipulate market fluctuations. If he could arrange reverse transactions in advance, he could make the other party's plans go to waste.

"The advantage of high leverage is that it can quickly move the market, but its weakness is extreme volatility," Li Hao muttered to himself. "As long as we can make the market deviate even slightly from their expectations, their leverage will become a fatal burden."

Li Hao quickly arranged a series of reverse transactions through the account of Xinxing Zhitou.

He selected some option positions associated with the fund group and established his own reverse position at a very low cost.

These positions may seem insignificant, but they can have a fatal impact on market trends at critical moments.

When a secretive money group tried to drive down the price of a tech stock, Li Hao's reverse trade came into play.

He used Lao Pi's probability analysis ability to increase his positions at the best time, and constantly adjusted his strategy through feedback from changes in market liquidity.

A silent competition in the capital market is unfolding in secret.

Participants in the derivatives market were also fortunate enough to witness an epic showdown.

"Why is it that every time we get to the critical moment, there's always an invisible counterparty disrupting us? Is this Noah Technology again?"

In a gorgeous room, a senior trader complained.

"That's not right. Aren't they a technology company? They mainly deal in databases. Even though they're listed, they don't have this kind of strength, right?"

Another trader with a newer face said.

"You don't understand this. It's obvious they didn't do a proper background check. Li Hao, you know that? That New Star Investment is Nova, and he's the founder. They have the highest returns across all markets and strategies, but they just use the Nova name."

The senior trader replied.

"What should we do? Should we withdraw now and redeploy?" asked the newcomer.

"No need. We suffered a huge loss at Li Hao's hands last time. This time, we must make him pay back everything he lost with interest!"