Chapter 19
Translator: Dreamscribe
“.......”
Warning alerts were ringing from all directions.
It was the first time a risk alert of this magnitude had appeared, and Manager Kim Sang-gon could feel cold sweat running down his back.
Only one thought came to his mind.
‘We’re fucked.’
Just a few minutes ago, there was nothing to manage in terms of risk, and everyone was simply enjoying tea time.
But with the sudden announcement of regulations by the Chinese government, sell orders exploded, triggering warning alerts on every monitor.
“Team Leader. Wh-what should we do?”
Manager Kim Sang-gon was the first to run to Team Leader Sung Il-gu.
But Team Leader Sung also had a blank expression, as if his mind had shut down.
“What can we even do... Should we halt trading? Everyone should at least stop loss quickly.”
This was something beyond the control of the Risk Management Team.
There was nothing they could change by stepping in now.
The water had already been spilled.
The traders had to figure out how to scoop up even a little of it again.
“We just have to hope to avoid the worst-case scenario.”
All they could do was stand by and watch.
In a disaster-level event like this, there was nothing they could do.
Manager Kim weakly trudged back to his seat.
There had already been a big commotion from the previous nickel incident, but this was on a completely different scale.
They were talking about performance bonuses and whatnot.
This month, or maybe even next month, it looked like they would be left twiddling their thumbs.
“But over here-.”
In the middle of the bear market that had turned into an icy age with everything flashing blue, there was one place that was burning brightly with fire.
The only person who shouted NO when everyone else said YES.
Not just talking, but the crazy bastard who actually bet 50 billion on the bubble bursting.
“Team Leader Jung Jin-ho...!”
It was none other than Team 7, led by Jung Jin-ho.
***
“.......”
I blankly stared at the screen.
Until the surprise regulation announcement by CSRC, I had been wavering like a reed, unable to make up my mind.
Just when I would resolve to keep going like this!
When I actually looked at the charts, my heart would weaken and I'd be contemplating whether I should sell right now, and then that single announcement burst the bubble.
‘Looks like there’s chaos outside.’
The previously quiet Trading Department had regained its energy.
Everyone was running around and screaming like crazy; I don’t think I’ve ever seen such chaos since joining the company.
“Team Leader!”
Before long, team members swarmed into the Team Leader’s Office.
They all had a half-crazed look in their eyes.
“Team Leader. H-how did you know about this?”
“Do you perhaps know someone in the public security bureau...?”
No way.
There's no way I, who can't speak a word of Chinese, would have connections in the public security bureau?
“You know that saying. When a mother carrying a baby on her back shows up in the stock market, that’s a sign the bubble is about to burst.”
It was something I picked up while studying investments.
It meant the market had become so overheated that the bubble was bound to pop.
The problem was, the Chinese market had already been overheated for a long time.
So much so that people had forgotten the bubble would inevitably burst.
“Even so, how did you know that...?”
“Everyone quiet. This isn’t the time to be questioning that. How could mere mortals like us possibly understand the foresight of the Team Leader?”
At Manager Seo’s remark, everyone began to calm down.
“Team Leader. Please give us the next order. Should we hold for now? Or sell before the price starts to rise again?”
I moved the mouse cursor to the sell button.
“.......”
There was no feeling.
I wondered if maybe I just needed more time, so I waited a few more minutes.
“Team Leader...?”
“Shh. He’s thinking.”
“Ah. Sorry.”
Still, I didn’t feel anything.
Maybe it was because there wasn’t enough data.
“What do you think, Manager? Do you think it will go up again?”
“CSRC made too big of a mess. Just a few days ago, didn’t the Chinese government stir people up by insisting they would stick to their support policies to the end? And now they’ve suddenly stabbed everyone in the back... I think the shock will last for a while.”
There was merit to that.
“What do the rest of you think?”
“The Chinese government definitely stabbed us in the back, but I don’t think even they expected the shock to be this big. There are projections that the Shanghai Stock Exchange could fall by nearly 7% just today, right? If it gets to that point, they’ll probably activate a circuit breaker or shut down the market entirely.” (TL Note: https://en.wikipedia.org/wiki/Trading_curb)
“The problem is that the Chinese stock market currently doesn’t have a circuit breaker. If it looks like it’s going to drop further, they will definitely close the market early.”
When the market becomes too overheated, there is a mechanism called a circuit breaker that temporarily halts trading. However, the Chinese stock market did not yet have a circuit breaker system.
Instead, they made an extreme choice of shutting down the market early.
“If the shock is this severe, there’s a high chance the Chinese government will change its stance.”
“They might lift the margin trading regulations again.”
“That won’t happen. Most people have already been hit with margin calls and had their positions forcibly liquidated. They've already crossed a river of no return.”
“Then wouldn’t the Chinese government try to contain the situation by injecting its own capital?”
I just silently listened as the team members continued to offer their opinions.
“Team Leader. The ETF price has only recovered by as much as it dropped, but the put options have already doubled in price. Should we sell them now?”
Put options are rights that are purchased with a premium.
The price changes depending on the expiration date, but you can always resell the rights to someone else with a premium.
One interesting thing is that while stocks have a fixed upper limit of 15%, options have no such limit.
And that premium price had already doubled.
Just in case, I looked over the trading screen again.
“.......”
Still, my intuition remained calm like a quiet ripple.
“We’ll hold.”
***
The team members came out after finishing the meeting.
They held their breath at the suddenly quiet atmosphere in the department.
Until just before entering the Team Leader’s Office, hadn’t everyone been running around yelling like madmen?
"Ah. It looks like China ended up closing the stock market after all."
That’s why the others were now sitting blankly, looking defeated like remnants of a routed army.
“.......”
Just this morning, those people had looked exactly like the members of Team 7 now.
But now, that world line had been reversed.
The atmosphere made it hard to tell whether they should laugh or cry.
“There’s still price movement happening on the put option side, but nothing yet from the others, right?”
“With ETFs, we profit as much as the market drops. But for the other shorts we’ve placed, I think we’ll need to wait a bit.”
“True. The earthquake has happened, and now the tsunami must be rushing toward those areas.”
What was terrifying every time such an incident occurred in the stock market was the aftershock.
Just like a tsunami follows an earthquake, a massive aftershock would soon hit the domestic stock market as well.
“Ah. It’s such a shame. If we had just a bit more supply of put options, our profit rate would be even greater right now.”
“Nothing we could do. There’s a limited supply of put options for the sectors we were targeting. We scraped up everything that was available, remember?”
The options market has high volume and various products listed here and there, but when it comes to selectively buying only products in the exact sector I want, there are inevitably quantity limitations.
One thing was certain: all the put options in that sector had been completely bought up by Team 7.
“But our Team Leader. He’s seriously amazing. We bought those three days ago, right? And that turned out to be the all-time low. The price had even gone up a bit two days ago.”
It was worth the agonizing wait, spending those days in uncertainty.
How did he manage to choose the exact lowest point as if he had a sixth sense?
“This is why they say buying is a skill. The Team Leader knew exactly where the bottom was.”
“Come on, really? You think that’s a real skill? Like, based on analysis?”
“There’s probably instinct involved, but to sharpen that instinct, of course analysis has to follow. You guys have invested too, so you know.”
That’s why it was all the more incomprehensible.
From the timing of catching the bottom, predicting the bubble’s collapse, to the monstrous nerve it took to bet 50 billion, none of it made sense.
“That’s why I said it. If it’s the Team Leader, we can trust him.”
Deputy Manager Lee Hye-rin raised her shoulders with a proud humph.
“Deputy Manager Lee, I’ve actually been curious. Back when our Team Leader worked under Team Leader Park, what was he like? Did he have this kind of investment sense back then too?”
“Isn’t that why he got promoted at lightning speed?”
“Ugh. I’m dying to know. Just tell us a little bit, Deputy Manager.”
“Hehe. He was amazing. Ah~ where do I even begin? So, when our Team Leader first did mock trading, he suddenly went all-in on a stock of JoongAng Insurance and...”
As Deputy Manager Lee began sharing his legend, the team members perked up their ears and their eyes sparkled.
They say turbulent times give rise to heroes.
In the chaos of the stock market, Jung Jin-ho was their hero of the times.
***
I had a unsettling dream last night.
Was it because of this?
Kim Kang-hyun, CEO of KS Securities, still felt a throbbing pain in the back of his neck.
“But there wasn’t any talk about a regulation announcement, right? Not even a hint. Didn’t our informants say anything?”
“No, there was absolutely no indication. It feels like these bastards acted on impulse.”
If they had been preparing the regulation for at least a few weeks, there would have been some buzz.
But there hadn’t been the slightest hint.
In other words, the Chinese government realized the bubble had grown far beyond their expectations and decided to act before it was too late.
“If they were going to do this, they should’ve at least leaked something. No, wait. What if other securities firms were prepared in advance? Have you heard anything?”
The bigger the securities firm, the faster they hear industry news.
And the network they’ve built is not something to ignore.
“The smaller securities firms that had leveraged positions here have already gotten hit with margin calls. They’re basically beyond recovery. Even the slightly larger firms are taking heavy damage.”
“Tsk. That makes sense. If even we, industry leader KS Securities, didn’t know, how could anyone else have known?”
“Yes, but CEO-nim. There is one strange rumor going around right now.”
“Strange rumor? What kind of rumor?”
“Apparently, one securities firm started buying put options in bulk three days before the bubble burst. And not just any puts, but those on raw materials and steel. They bought them all up regardless of expiration dates.”
“What... what did you say?”
CEO Kim Kang-hyun’s eyes widened.
“Three days ago was when the market was on fire during the rally, wasn’t it? And someone was buying puts at that time?”
“Yes. Based on the scale, it appears to have been a securities firm, but the exact identity hasn’t been revealed.”
It was a strange occurrence.
At a time when stock prices were soaring, someone swept up put options on raw materials and steel in units of billions.
This could only mean one thing.
“They knew.”
There was no other explanation for why they would scoop up all those contracts.
They clearly knew something.
“Are you sure? You’re certain nothing leaked from the Chinese government side?”
“Yes. I’ve checked several times. Even at CSRC, they made the decision and released the announcement on the same day.”
“Then what the hell happened with the guys who swept up all those scraps of paper? Were they mind readers? Or did they hire a shaman to tell the future?”
“That’s...”
Someone had known this information in advance.
Otherwise, there was no way they would have taken all those positions.
“You know it too, right? In this field, information is life. After the National Intelligence Service, the one with the fastest intel should be KS Securities. That’s how we’ve maintained our position as industry leader. But now we’re falling behind in information?”
“.......”
There was a reason CEO Kim Kang-hyun was reacting so sensitively.
It was the first time that KS Securities, the undisputed number one in the industry, had fallen behind in terms of intel.
Everyone talks about how insider trading is prohibited, but everyone knows the truth.
To win in the stock market, you have to be ahead in information.
“Find out which securities firm it was.”
“I’ll look into it as quickly as possible.”
The Chinese bubble burst?
Sure. That’s something that can happen.
They would take some losses, but they had been consistently managing risk precisely to soften this kind of blow.
But what was more frightening than the losses was the fear that someone had gotten ahead of him.
For the first time in a long while, CEO Kim Kang-hyun felt a chill run down his spine.
*****
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