The various facets of market manipulation: hedging leads to margin calls, big players admit defeat, and retail investors' dreams are shattered.

Early investors looking to hedge

You are an investor in Project A. During the Series X funding round, you invested $1 million at an average price of $0.01. After a year, you are finally about to unlock your investment. During this year, you have seen the price slowly drop from the initial $1 to $0.005, falling below your cost price.

In the past two days, this coin has suddenly surged, reaching 0.1 USDT. Although it hasn't returned to its peak, you've considered that making 10 times your initial investment is worthwhile in the current market. So you've allocated 100,000 USDT to lock in the 10% profit from the recent unlocking. You've opened with 1x leverage and placed a short order at 0.1 USDT, with a position of 100,000 USDT.

The day before the unlock, the price suddenly surged to 0.8. You added 100,000 USDT in margin before it reached 0.2, another 200,000 USDT before it reached 0.4, and a further 400,000 USDT before it reached 0.8. Finally, you got tired and stopped, and your position was liquidated, turning your 800,000 USDT unrealized loss into a real loss.

A large red Liq (liquidity limit) bar brought a massive influx of market buying liquidity, driving the price from 0.8 to 1.2, triggering a cascading liquidation of all similar positions above it. During this process, the manipulator secretly placed a huge number of limit sell orders above the price. To prevent the price surge from being too drastic and causing a margin call on the exchange (which would later result in account suspension), the manipulation was extremely smooth. In this wave, the manipulator made a fortune.

As for you, you initially only wanted to lock in a stable profit, say 90,000 USDT, but ended up losing 800,000 USDT. Examples like this abound; when the market structure is poor, funds flow to where liquidity is high. Traders especially favor those with strong financial backing who can add unlimited margin.

Arrogant US stock arbitrage master

You've been trading in the US stock market lately. You're familiar with the Trump family's trading methods and have found arbitrage opportunities, earning $10 million. The market manipulator for Project A knew the US stock market wouldn't be active over the weekend, so they created a fake market on Friday and Saturday to keep things interesting and help people pass the time.

Suddenly, you see some idiot coin on the gainers list, its price skyrocketing. You think to yourself, "Holy crap, what is this?" At 0.1 USDT, you casually short 10,000 USDT, thinking, "I have unlimited margin later, how can you possibly pump it 1000 times?"

Then you, like the hedger above, experienced the same initial phase. The price surged from 0.1 to 1.2, and the guy couldn't hold on any longer and didn't add more margin, causing the fuel to be liquidated and pushing the price down to 1.2. At this point, the price had increased 12-fold from 0.1 to 1.2, and your unrealized loss became 110,000 USDT. You thought to yourself, "I can manipulate even the Trump family at will, I don't believe I can't outlast this little market manipulator. I have unlimited margin."

Of course, the market maker knows you're wealthy and have substantial unrealized losses. They've calculated the account's unrealized profits and found a significant shortfall, with no major new short positions entering recently. These people are the market maker's clients, there to give them money. The market maker thinks, "I need to treat them well. After all, I need to make money off you to buy my girlfriend a Birkin 25 while she waits for me at the Rosewood Hotel in Hong Kong. I heard black silver is popular lately; I promised her I'd buy her the best after I finished this project. After all, my girlfriend's emotional value is incomparable to candlestick charts."

Thinking of this, the trader became extremely excited. After reviewing the spot market-making process, and thinking about his girlfriend waiting for him at the hotel, he thought, "Okay, let's go all out." He pushed the spot price up a few points, manipulating the Index Price, and the contract fees immediately turned negative.

"I heard you have unlimited backup plans? I heard the Strait of Hormuz has recently added another layer of protection fees? Sorry, you're in a worse situation here than a ship trapped in the Strait of Hormuz. If you stay here, you'd better pay me your protection fees every hour." The fees were collected hourly, and the bookmaker collected them continuously for six hours.

At this point, the trader was getting impatient because his girlfriend kept urging him. The market maker, however, didn't care anymore and just kept pushing the spot price up. Although there were many spot buyers, most were only making paper profits; the supply from sellers was limited because people tend to sell when prices fall and rarely sell when prices rise. So, the market maker's rapid price manipulation drove the price up nearly eightfold in a few hours, from 1.2 to 10U.

In the end, even the seasoned trader who was skilled in the US stock market got scared. The price increased 100 times from 0.1 to 10 USDT. He started by shorting 10,000 USDT and subsequently lost 990,000 USDT. Including fees of 310,000 USDT, the net loss was 1.3 million USDT.

Technically-driven retail investors who blindly follow indicators

You are an ambitious and motivated retail investor. Recently, you've gained a lot of experience shorting on STO and Siren, and have summarized a set of techniques for catching big players. The conclusion is: when the 1-minute OI (open interest) drops by 10% and the price rises by 50%, that's the best shorting opportunity, without exception.

You've been using this method to make a killing in the market, but lately you haven't had any big profits for several days. You think your strategy has a 100% win rate, and you feel like you have the whole world in your hands. So you keep trying it out during the price surge of Project A.

When the price jumped from 0.1 to 1.2, you thought it was already 12 times the initial investment, but there was still no opportunity, and you were getting a little anxious. Sure enough, your hard work paid off, and your strategy hit the mark as the price rose from 1.2 to 3U. You went all in with 1x leverage, but you found that the price quickly recovered after falling, instead of the one-sided pullback you predicted, and continued to surge.

You're a little panicked, but still think it's not a big deal, so you decide to wait and see. Eventually, the price reached 5 USDT, and quickly climbed to 10 USDT. Your position was liquidated.

The world suddenly went dark. You realized you weren't a god, and the world wasn't in your control. Your confidence plummeted. You thought to yourself, "Why is Zhuang targeting me? It feels like he's sniping at me, going against me."

But what you don't know is that you're just a speck of dust in the market manipulation process, merely caught in the crossfire. The market manipulators aren't targeting you; they're always targeting the big spenders.

A resounding victory, yet the beloved dog dealer lost his heart.

You're the dealer. You made money this round and happily returned to the Rosewood Hotel. On your way back, you casually bought a Birkin 25 Black Silver with your winnings, wanting to surprise her.

Little did you know, you'd been manipulating the market for three days. When you returned to your hotel room and opened the door, you found it empty. You texted your girlfriend, but a red exclamation mark appeared on the screen.

You're conflicted and puzzled. Just then, you find a small note on your bed that reads: