One of the defining characteristics of derivatives is that they’re a zero-sum ga.
If soone profits, soone else loses.
That’s the nature of the contract.
If you’re shouldering that kind of risk, it better co with returns. That’s why derivatives usually embody the phrase “high risk, high return” better than anything else.
“The goal for now is ten billion won.”
I spoke calmly as I sipped the remaining milk from my glass. Lee Si-hyun’s eyes widened in shock.
“...Ten billion? Ten billion won? H-How?”
“Why? If my prediction’s right, making a hundredfold return is easy.”
Turning one hundred million into ten billion.
That kind of thing happens fairly often in the options market. Of course, the reverse happens just as often, too.
For reference, during the 9/11 attacks in 2001 and the options shock in 2010, there were returns of 50,000%. That’s five hundred tis your investnt. The people who profited made an absurd amount of money, and the ones who lost...
Well, they were wrecked. Even now, when I think back to that ti, my hands and feet still tremble. Damn Deutsche Bank bastards.
“What if you lose?”
Naturally, Lee Si-hyun—who didn’t know the future—asked that. I shrugged and replied as if it were no big deal.
“Then I just lose a hundred million. I’ll sell off so stocks or sothing.”
“...”
This is an investnt thod only a third-generation chaebol heiress could pull off. What would be a life-or-death gamble for most people is just a manageable investnt for soone like —it drastically lowers the difficulty.
Honestly, if I’d been born into an ordinary household, I wouldn’t have dared try this. There’s always the possibility of a butterfly effect from sothing I overlooked.
“Besides, since I’m only buying options outright, the worst-case scenario is I lose my principal. It won’t go beyond that.”
Whoever sells the options to is going to be in a bit of trouble. The full ten billion I earn has to co out of their pocket. But hey, I’m buying an already-issued option, so to them it won’t be any different from how it played out in the original tiline.
“...Is it possible to lose more than your principal?”
Lee Si-hyun shook her head in disbelief at the ruthless edge of capitalism we were discussing.
“That’s right. Like I said, the risk is completely insane. My position is one of the safer ones.”
“Losing your entire principal is considered safe...”
“Alright, let’s leave it here for today. If I explain any more, your head’s gonna start hurting. Ti to get moving. Reach out to that guy from the securities firm we t before.”
Lee Si-hyun slowly nodded and pulled out her notebook.
“Oh, yes. Got it. You an Executive Director Ha from Daehwa Securities, right?”
“Yup. He worked at the Tokyo Stock Exchange before, so he should get the general idea. He’s not from the core bloodline, so he’ll listen.”
Now that it was ti to work, I could feel the energy returning to my limbs.
My previously relaxed posture straightened, and the eyes that often curved into smiling crescents sharpened with focus.
I looked in the mirror. The reflection of Yoo Ha-yeon still held the innocent smile appropriate for her age, but the overall atmosphere had completely changed.
It was money-making ti.
***
With no smartphones and outdated computers, current securities trading mostly happens either in person or over the phone.
Sotis in Hollywood movies, you see those old Wall Street scenes—phones ringing nonstop in crowded offices, staff frantically trying to convince clients to buy certain stocks. That’s the world we’re in right now.
Fortunately, I don’t have to deal with all that chaos myself. I’m a minor to begin with, so I couldn’t even if I wanted to. This kind of work is usually left to brokers.
“Oh, young miss. Welco.”
A friendly, good-natured face.
But there was sothing sharp in his eyes, and the slightly eerie vibe he gave off reminded of those characters in comics who pretend to be good guys until revealing their true colors a few chapters later.
His na was Ha Joo-seong. Executive Director at Daehwa Securities.
Smiling broadly, Ha Joo-seong gave a respectful nod. He’d initially been skeptical of , but after I demonstrated my knowledge and ability, his attitude flipped completely.
In this field, the average can never beat the genius.
—“There’s a world of difference between people who can sll money and those who can’t. Just look at the chairman and you’ll see...”
It sounded like flattery, but I didn’t care. I had the skills to turn that flattery into reality.
“Mister, I’m here because I want to do so options trading.”
“Ah, I heard. You’re interested in foreign exchange options, right? Whew. If it were anyone but you, I would’ve tried to talk them out of it right away. Honestly, I’ve only dabbled in stock options myself. Just once, and it scared the life out of —”
He wiped imaginary sweat from his brow in an exaggerated gesture. Not the most confidence-inspiring display, but still—Ha Joo-seong was one of the few people in Daehwa Securities’ executive line who had actual field experience, despite the firm being only two years old.
‘Just last year, investing overseas wasn’t even possible.’
If Daehwa Securities hadn’t been established two years ago, I might’ve been stuck. But with the Daehwa Group backing its own securities firm, not using it would’ve been ridiculous.
Of course, once the succession war kicks off in earnest, I might not be able to trust even people here...
Luckily, when # Nоvеlight # Daehwa Securities was founded, it coincided with the start of my awakening.
And Yoo Seong-pil, having grown emotionally fragile after Yoo Jin-cheol’s death, had relaxed enough to let insert one of my own people into the company.
That person was Ha Joo-seong. He was about to crash and burn after aligning with the wrong faction, and I snatched him up cheap.
“You’re fully aware of the risks of options trading, I assu. So let confirm first—foreign exchange options, right? Yen/Dollar call options?”
If the yen’s value rises, the value of a call option to buy yen at a cheaper price also skyrockets. On the flip side, if the dollar’s value drops, the put option that lets you sell it at a high price becos very lucrative.
“Right. And if there’s money left over, I’ll buy so other options too—maybe a dollar/yen put.”
At that, Ha Joo-seong raised a skeptical eyebrow.
“Is that necessary...? Didn’t you say you’d only invest one hundred million won? The exchange rate’s a hot topic these days, so trading volu should be pretty high.”
The scale of 1980s options trading may have been small, but that’s only by Arican standards.
The Chicago Board Options Exchange (CBOE), the world’s first and largest options market, had already begun computerizing trading. Volus were rising fast.
It didn’t matter whether they were stock or foreign exchange options. A hundred million won might be a lot for an individual, but for an institution, it’s pocket change.
“I just don’t like plain-vanilla options. Everyone knows the G5 finance ministers are eting on September 22nd, right? That ans the market’s already braced for it. No chance to hit it big. I want to buy sothing rarer—sothing with lower volu that requires splitting the order because you can’t buy it all in one go.”
This translation is the intellectual property of Novelight.
“...Is that also why you’re going for foreign exchange options instead of stocks?”
I nodded in affirmation.
“Yeah. Stock options have a fixed expiration date—always the 20th of the month. But forex options let you set the expiration yourself, so they’re more flexible.”
Lee Si-hyun, who had been silently listening by my side, didn’t seem to pick up on the nuance at all—but Executive Director Ha Joo-seong, a seasoned trader, imdiately understood what I ant.
In truth, even without resorting to sothing niche like forex options, there are plenty of options that correlate with exchange rates. Like trading stock options tied to Japanese companies.
But there was a problem.
The traditional expiration date for U.S. options is the third Friday of every month. For September this year, that falls on the 20th.
Unfortunately, the G5 finance ministers’ eting—where the Plaza Accord was signed—happens on September 22nd. The expiration date misses the event by two days.
That ans I’d have to buy options expiring next month... but then the expiration would be way too far off.
People aren’t stupid. Once the Plaza Accord is announced, even without tipping them off, everyone’s going to start predicting future exchange rates. If I use standard options, my share of the profit gets severely undercut.
So... stock options are off the table.
“...Um. Would it be okay if I asked for an explanation?”
My secretary, puzzled, looked at and asked. Even with others around, she set aside her pride and asked anyway. I liked that about her.
‘That’s a very good reaction.’
Since Lee Si-hyun happened to give just the reaction I was looking for, I decided to kindly elaborate.
“Option prices drop the closer you get to expiration.”
Options and futures both have expiration dates. They’re contracts, after all—each one cos with a specified deadline by which the contract must be fulfilled.
It’s kind of like a shelf life. As ti passes, even the sa item loses value.
“So if I try to buy an option on the 21st to prepare for the finance ministers’ eting, I’ll have to pay a huge premium. Since the previous contracts expired, and the new one I buy would have a full month left to go.”
And the G5 finance ministers’ eting isn’t exactly a secret. The results of the Plaza Accord were shocking, sure—but the people at the Chicago Board Options Exchange are probably already betting on what’ll co out of that gathering at the Plaza Hotel.
“So basically, if you want to make real money, you have to predict sothing no one else knows yet.”
A eting between finance ministers from the major powers—combined with the strong suspicion that the U.S. would force a correction in the dollar-yen rate, their biggest thorn in the side—was practically a given.
In other words, there’s no profit in it.
“Exactly. The lower the probability, the higher the payout. And I’m going to bet on the most extre end of that spectrum. Sothing way more aggressive than a standard forex option.”
Upon hearing that, Executive Director Ha Joo-seong turned his eyes toward , lips slightly parted. It seed he had caught on to my plan.
“Y-Young miss... you don’t an...”
“Yup. You know the really extre types, right? The ones you can’t even trade officially—only through over-the-counter deals.”
“Most forex options are OTC already, as far as I know... but you’re not talking about those, are you? Then, you couldn’t an...”
“Yup. It’s exactly what you’re thinking.”
An option that becos a standard option only if certain conditions are t—but if those conditions aren’t t, it becos worthless scrap.
I’m going to buy a barrier option.
“A knock-in barrier option, to be exact.”
At my words, Ha Joo-seong took a deep breath and asked cautiously,
“What barrier price are you aiming for...?”
“One dollar to 215 yen.”
“...!”
Right now, the exchange rate is over 240 yen to the dollar.
“A-And what’s your basis? I an the expiration date.”
I smiled brightly. A childlike, innocent smile—fitting for my age.
“Expiration on the 23rd. Based on New York cut, that should line up.”
The day after the Plaza Accord, the exchange rate—which had been sitting at 235 yen to the dollar—crashed to 215 in just one day. A year later, it drops to half of that.
“...Are you insane?”
Ha Joo-seong’s eyes trembled. Even during his own trading days, he had never seen anyone attempt sothing this crazy.
“Why? I’m being perfectly rational. The outco is simple and crystal clear.”
If I win, I earn 10 billion won.
If I lose, I get nothing.
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