Chapter 20

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Translated by Heavenly Cat

Read it only at Novelbyu.com & Utoon.net

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Options.

A truly interesting financial game.

The concept of options existed even in ancient Greece, and during the 17th century Dutch tulip bubble period, there were contracts that predicted and traded future price fluctuations.

The modern options market began when the Chicago Options Exchange appeared in the US in 1973.

A financial product that trades the right to buy and sell specific price assets in the future.

That was options.

That’s why securities firm people call it lottery tickets.

The Korea Exchange standardizes and lists options as products, institutions sell them, and investors pay premiums to purchase the rights.

These lottery tickets can be sold to others before expiration.

The price varies wildly depending on the market.

Like all lottery tickets.

Most options become worthless paper on expiration day.

But sometimes, really sometimes.

Judgment day comes.

“Section Chief Kim. How much has it risen now?”

“Right now 9. No. It’s 10 times now.”

“Crazy. Then won’t there be a margin call soon?”

“Yes. The Korea Exchange contacted us saying we need to prepare additional margin.”

People buying options didn’t care what happened to stock prices.

They could just resell them, or give up their rights on expiration day.

Then who’s the problem?

The original seller.

Original option sellers need to deposit margin at the Korea Exchange to sell options.

The rule is to deposit 5 to 15 times minimum margin.

The problem is when the sold option price exceeds the margin, a margin call happens.

And the moment they can’t meet this margin call, forced liquidation comes down.

“Forced liquidation absolutely cannot happen!”

Whether the original seller is a fund, institution, or securities firm.

The moment forced liquidation happens, trading is temporarily suspended and positions are forcibly liquidated at current skyrocketing market prices, causing tremendous losses.

“First gather back the ones we spread! And roll over the ones with other expiration dates.”

“Can the costs for margin call be resolved, Department Head?”

“I told them upstairs. To let us put out the urgent fire. Right now responding to margin call comes first. Upstairs is also going crazy telling us to quickly scrape everything up before prices rise more.”

When Chinese securities first crashed, only overseas was in chaos while the domestic stock market was somewhat quiet.

But that tsunami rushed in instantly and floods broke out everywhere.

They needed to quickly scoop out the water pouring into the house, but there was one problem.

“What’s going on, there’s so much buy order volume but no one selling! How many times more profit are they trying to make!”

Already 10 times.

Yet someone who swept away all the volume isn’t releasing it.

The more that happened, the price kept rising.

At this rate, not 10 times but 20 times seemed possible.

“Ruthless bastard. Who the hell is bleeding us dry?”

Everyone knows.

That bubbles burst eventually.

That’s why there’s such a saying.

That catching optimal selling timing is heavenly luck.

In other words, those who escaped before the bubble burst are winners.

“Last month too, and this month’s performance will also be hard to expect. There’s not a single day that just passes by.”

“Still, we defended well. The ripple effect from China arrived a bit late to Korea than expected. Plus, meticulous risk management was big.”

“What good is managing risk well? In the end, it’s all negative. Do you know how many reports I received just today?”

“That’s true. But seeing other securities firms crying out, we’re fortunate.”

If there’s a bull market, there’s bound to be a bear market.

But the problem was sometimes it comes too big.

“Lucky it didn’t grow to Lehman Brothers level.”

“Phew. Compared to subprime, this is heaven.”

Recalling the 2008 subprime mortgage crisis, President Hwang Dae-woon still feels dizzy.

“Back then, options rose 100 times and quite a few places closed. We also had margin calls and even borrowed money with bonds as collateral.”

That’s why after that time, Gwangwoon Securities built systems to make the options side as less dangerous as possible.

Even if profits are less, so that damage is also less if that situation unfolds again.

“But this incident will also be fatal for those who spread lottery tickets.”

“Right. Especially several funds and securities firms are in chaos.”

“Why? Because prices rose?”

“Prices are naturally skyrocketing, but the problem is those who swept up the volume aren’t throwing it. Volume occasionally comes out, but really small amounts, and those holding large quantities aren’t appearing. Right now everyone in Yeouido has their eyes burning searching for who’s holding it.”

“Ha. At this level, didn’t they have inside information? They swept it all up in advance and aren’t even throwing it? Ruthless.”

“Yes. The selling side is probably bleeding dry. Because prices keep soaring endlessly.”

But something had been bothering him.

Executive Director Tak Jae-ho making the report keeps grinning.

The company took such losses because of the Chinese stock market!

“But why are you smiling like that?”

“President. You didn’t ask who’s holding those options.”

“How would we know that? How dangerous is it to have your position exposed?”

What position I’m taking.

That must never be exposed to the other party.

Because if done wrong, there’s high probability of being manipulated.

That’s why they kept thorough secrecy about who took what positions.

“Do you know what happened to the new team leader? You haven’t received a report yet, right?”

The new team leader could only be Jeong Jin-ho.

“I was just worried whether our Jin-ho is enduring well. How is it? Is it very bad there too?”

Right after becoming team leader, this suddenly exploded so the losses must be huge.

Isn’t it that kind of market?

I should probably console him separately after things calm down a bit.

That it’s an unavoidable natural disaster, so don’t be too discouraged.

“Wait.”

But something was strange.

“Why are you suddenly talking about Jin-ho?”

Executive Director Tak’s lips curled up.

“That volume is all in Team Leader Jeong Jin-ho’s hands now.”

“That volume, you don’t mean.!”

“Yes. The volume Yeouido guys are searching for now.”

“!?”

Not today either.

I was staring at the 9 monitors, moving the mouse back and forth toward the button.

From the options we bought to ETFs.

Everything is showing profits.

Among them, the most profit is of course these options.

Honestly, if I had my way, I’d want to dump everything now and take profits.

But the feeling hasn’t come yet.

That’s why since the bubble burst, I’ve been sitting blankly in the office just swishing the mouse around.

Knock knock.

“Ah, yes.”

Then Deputy Lee Hye-rin entered..With a plate of cookies in one hand.

“Team Leader. Please have some snacks while you work.”

Did she see me flinch?

Deputy Lee put the plate in front of me and placed both hands on her hips.

“I didn’t make these. Could you not be so startled?”

“Haha. Wh-when did I? I like Deputy’s cookies.”

“Our team leader. You really can’t lie. It’s written all over your face!”

“..”

“Just watch. I’ll practice a lot and make the most delicious cookies in the world!”

“I’m rooting for you!”

While saying that, Deputy Lee casually asked me.

“But Team Leader. We still need to keep holding, right?”

Team members must be bored too.

Usually prop traders must fight in that thrill and breathless tension, hitting day trades hundreds of times a day.

Other teams are already diligently day trading to somehow make up losses.

But we’re just doing nothing, spending time.

“As I told you before, trading is free. If you think now is selling timing, it’s okay to sell right away. You’ll definitely make profits.”

“But I also think holding now is better. The Chinese government isn’t coming out with any groundbreaking measures. Thanks to that, we keep making money.”

That seemed to be exactly why my intuition wasn’t ringing.

That something to stabilize this market hasn’t come out yet.

“I’ll tell you when selling timing seems to come.”

“Wow. Then we’ll wait for Team Leader’s instructions!”

Deputy Lee bowed and went outside.

After confirming the deputy left, I put a cookie from the plate in my mouth.

Ah. Delicious.

Sorry to the deputy, but it feels like eating delicious cookies for the first time in a while.

While waking from drowsiness with cookies and coffee and bringing the mouse to the sell button.

“.!”

Some signal rising from my fingertips struck my mind.

“What did Team Leader say?”

“What? Ah. Team Leader also seems to still be holding.”

“Well. Selling now is too wasteful.”

Though you’d think doing nothing would be very boring, Team 7 members weren’t actually like that.

Though the office was warm, their hands were trembling now.

Team 7 is currently recording the highest profits since they became prop traders. The problem is to get profits, they need to sell their holdings.

That’s why they were barely holding back wanting to dump all holdings right away.

“When do you think Team Leader sees selling timing?”

“Who knows? How can sparrows know phoenix thoughts? We just need to follow instructions.”

Section Chief Seo said that while slurping coffee.

“..”

Team members looked at him strangely.

When Section Chief Seo first joined the team, he seemed full of complaints.

But now he was almost worshipping the team leader.

“They say catching selling timing is hardest than buying timing. Team Leader must be being careful.”

“If nothing particular happens, continuing to hold like this looks fine too. Just looking at current indicators, taking selling timing later is the wise choice.”

But just because indicators are good now doesn’t mean that’s necessarily the answer.

Can’t you tell just by looking at this bubble incident?

While everyone was painting hope with all kinds of indicators saying it would go to 300%, regulations suddenly came out and the bubble burst.

“So let’s wait. Even we think now is absolutely not selling timing.”

“Everything’s good, but there’s too little to do. Company life where I just look at my phone and books all day.”

“That’s also brief. If Team Leader gives instructions, then we too.”

Slam!

While team members were chatting away.

The closed team leader office door opened wide.

Everyone startled and turned their heads.

There stood Team Leader Jeong Jin-ho with different eyes than before.

“Team Leader.?”

“Everyone, now.”

“What?”

“Dump all the volume you’re holding.”

“!?”

Finally the instruction they’d been waiting for, no, the oracle descended.

But there are always one or two foolish humans who question such things.

“Team Leader. N-now? Prices are rising at their peak?”

“Just holding a bit more would make it rise more than now.”

“Everyone quiet!”

But Section Chief Seo rebuked such suspicious humans.

“How dare you have ego? Just move as Team Leader instructs. Got it!?”

They also snapped to their senses there.

Wasn’t Team Leader Jeong Jin-ho’s one word more reliable than a hundred pieces of data?

“Ah.!”

“I-I’ll sell quickly, Team Leader!”

The leisurely office suddenly became crazily busy.