The stock market can rise by 1,000 points in 6 years and then fall by 1,000 points in less than 3 weeks. Financial institutions and private traders know how aggressive these bear markets can be and also know how to generate hundreds of millions of dollars from these moves. One of them is the professional trader and portfolio manager, Clément FOURRIER, who shorted the SPX500 and USOIL contracts in the spring of the corona virus crisis.
“This kind of movement in financial markets only happens once or twice every 10 years. So people who sell short during these declines essentially make the same amount of money an investor makes in 10 years, but only in a matter of weeks. Explains Clément FOURRIER, also known as Menclet Trading on social media platforms.
He continued, “As a trader, you need to adapt to current market situations. A professional trader will know how to make money in a bull market (when the stock market goes up) but also in a bear market (when the stock market goes down).
In just 22 trading days, the SPX500 lost 35% of its overall value. On March 4, 2020, Clément FOURRIER decided to sell borrowed shares in order to buy them back later at a lower price. He actually paid to rent someone else’s shares, to sell them and buy them back later. In the days that followed, he was among short-sellers who posted a one-week paper profit of $25 trillion according to data from tech and financial analytics firm S3 partners measuring bets against stocks listed in the United States and American Depositary Receipts.
On March 11, 2020, Clément FOURRIER then decided to short sell USOIL, which is a CFD product based on the price of the West Texas Intermediate (WTI) futures contract. He explains: “Oil prices looked very vulnerable after the price broke a key corrective structure at $34.20 while Aramco also increased its maximum sustainable capacity to 13 million bpd. All of this led me to believe that oil prices were overvalued and led to my decision to short the asset to my $20 target. I was confident in my idea and actually shared it on my social media platforms.
Just 24 hours later, the following day, USOIL had fallen 8%. Over the next 9 days, USOIL’s value had lost more than 40% and hit Clément FOURRIER’s stretch target of $20 a barrel. While Clément FOURRIER accumulated three short sell positions, he made 900% profit on the risk of his first entry, 320% profit on the risk of the second and 200% profit on the risk of the last, totaling a cumulative return on its risk of 1,420%
