Chapter 23
Translator: Dreamscribe
"Why do you all look like that? Still hungover?"
"You know we didn’t even drink one bottle yesterday."
"Ugh. I wish it was a hangover. My hands were shaking so badly I couldn’t even sleep."
Manager Seo could fully understand the employees' situation.
Yesterday’s company dinner.
Hadn't Team Leader Jung Jin-ho suddenly make a bombshell announcement?
He said he would do short-term trading with a whopping 250 billion won!
"Ahh. I shouldn’t have brought up Greece back then."
"Even if we hadn’t brought it up, I think he would have said it anyway."
"No, but seriously, is our team leader for real? Is he really going to do short-term trading with 250 billion won? Honestly, shouldn’t we just relax and do nothing this month?"
Normally, once the profit target is reached, unless the market is in an extraordinary bull run, no one shows up to work.
There's a saying like that.
All prop traders are gamblers.
But there’s one thing people misunderstand, they stop once the target return is achieved.
Before they reach that return, they swing around fearlessly like warlords, but the moment they get there, they latch onto reason like a ghost.
They’re not crazy bastards who throw away their hard-earned money.
So even if they’re trembling to do short-term trades on weekends, once they hit their target return, they return to sanity and enjoy a vacation.
"Then what is our team leader?"
"...A dopamine addict?"
"Heart of a beast?"
"This isn't a beast. Isn't this someone without the emotion of fear? Not even 25 billion, but 250 billion! 250 billion won!!"
250 billion won.
It’s an enormous amount of money that ordinary people can’t even dream of touching or seeing in scale.
Even in KOSPI, where trillions of won come and go every day, 250 billion won is money that can never be ignored. (TL Note: Korea Composite Stock Price Index https://en.wikipedia.org/wiki/KOSPI)
Moreover, if this money is mismanaged, first it gets caught in KRX's surveillance network, and next it gets reported to the Financial Supervisory Service, leading to an investigation.
If you slip while walking that fine line, you might end up in jail for market manipulation.
Even so, the team leader declared he would move 250 billion won.
"How can our hands not shake in this situation!"
Not just their hands and feet, their hearts were pounding so hard they were going crazy.
"But hasn’t the team leader arrived yet?"
"Yes. He usually comes in early, so soon he should be..."
"Good morning, everyone."
At that moment, the team leader walked in with a smile.
Unlike the team members who couldn't sleep, trembling in fear of possibly blowing all the money, he looked completely cheerful. Not even a hint of dark circles, it seemed like he had a deep, restful sleep after the company dinner.
‘He really might be a monster.’
‘Could he actually be an alien?’
‘He’s not human...’
It was a mentality that mere mortals couldn't fathom.
***
"The daily trading volume of KOSPI is about 5.5 trillion won. And out of that, the funds we’re about to manage amount to 250 billion. That’s about 5%. It’s a huge sum."
"Even for a large-cap company like Kangsung Electronics, the daily trading volume is around 260,000 shares. That’s about 400 billion won. But if we put in 250 billion? That would be over 60%."
"Normally, if we inject 5 to 10% of the trading volume into a single stock, KRX puts you under surveillance. Then it goes to the Financial Supervisory Service. If it gets serious from there..."
It means a violation of financial law.
Because it could be seen as an intentional act to manipulate stock prices.
"Actually, Korea is really sensitive about this. Especially since the past stock manipulation scandal with DH Securities, the regulations have become even stricter."
People point out that one reason Korea's stock market can’t rise like the U.S. market is because of its stricter financial regulations compared to other countries.
To the extent that even banks, with all their money, can only profit from loan-deposit margins.
But this is unavoidable.
Because there are too many forces playing around with the Korean stock market.
In other words, so many fraudsters are stirring things up that regulations had to be put in place.
"That’s why even here at Kwangwoon Securities, most of our funds go into bonds, FX, or overseas stocks. Korean stocks are too risky to manage trillions of won with."
I expected this, but.
Still, Korean stocks are definitely not an easy game.
As the funds under management grew into the 100 billion won range, the corresponding regulations also increased.
"Then what if we appropriately split the buy orders and spread them out?"
"It's possible. The problem is, if the 250 billion won is executed from a single account with both buys and sells in a short period, that too becomes subject to monitoring. Moving around 250 billion at once is enough to be suspected as a market manipulators."
The typical amount each prop trading team operates at once varies by team, but the average is 30 to 50 billion won.
If 250 billion, several times that amount, is injected into the market all at once, it raises suspicions of market manipulation.
So, if prop trading teams work together to intentionally raise or lower prices, they can be subject to investigation by the Financial Supervisory Service.
Because of that, even when operating funds on a team level, senior traders manage money based on their individual judgment.
It’s necessary to distribute things like that.
I also came to learn this while studying investments.
"Has the Research Department sent the data? The one I requested late last night."
"Ah, yes. The Research Department says that there is a high probability Greece will not default. Even overseas, nearly 97% believe a default is unlikely."
Ninety-seven percent...
That was a pretty high figure.
"What do the rest of you think?"
"Well... of course, we think there won’t be a default."
It seemed they thought that way because the very idea of a government defaulting was absurd.
"But team leader, you believe a default will definitely happen, right?"
Yesterday, I had a strong feeling when I read the article.
But it doesn’t hurt to double-check.
"I..."
I reviewed the data the Research Department had sent.
Assuming a default does occur, which stocks would be affected?
In Korea, even if Greece declares a default, we won’t suffer as great a shock as the China shock.
The main issue would be the financial sector.
As European finance destabilizes, our company and other financial firms would take a hit in their stock prices. Also, due to global economic instability, consumer goods would be affected.
And the biggest concern was the disappearance of trading volume.
If a default happens on top of the China shock, people will cash out to buy safe assets like gold or stop moving their cash entirely.
In other words, neither buyers nor sellers remain.
It becomes a wasteland.
Then what would rise in contrast?
Due to the weak euro, export sectors would perform well.
Most notably semiconductors, electronics, and vehicles.
"......."
As I reviewed the stocks, I slowly raised my thumb.
"!?"
"Team leader?"
Like static electricity, I felt a sharp jolt.
It meant only one thing.
The 97% who said default would never happen...
Greece was really about to pull that reckless move.
"I think that 3% opinion is the right one."
"If you mean the 3%, no way..."
"You really think a default will happen?!"
I slowly nodded my head.
The team members let out short groans.
"But I don’t see any option recommendations here?"
"Ah, that... because during the last China shock, put options all skyrocketed in price. So most securities firms and funds, even if they took a loss, pulled all their options. Even though the Chinese government began efforts to stabilize the stock market, those effects are wearing off."
It meant that after taking a huge hit, everyone pulled their put options and didn’t issue new ones.
Since we ripped them off for nearly 20 times the return... If it were me, I’d be too pissed to try again too.
"Even the European ETFs have completely dried up now. Because of the China shock dragging the market down overall, the products themselves were pulled."
There’s a lot of money, but not many places to invest it.
In that case, we had no choice but to move to a bigger arena.
"Wouldn’t the FX side be able to handle 250 billion easily?"
FX.
The foreign exchange market.
Its daily trading volume is a staggering 5 trillion dollars.
So it is the largest financial market in the world, amounting to approximately 7,000 trillion won.
That’s why in this market, 250 billion won was nothing more than a trivial figure.
"That’s true, but... FX is not a field we can trade in directly, since there's a separate FX Department. We'd need special permission from upper management."
"If they approve it, we can do it, right?"
"It should be possible. They do occasionally approve foreign exchange or overseas stock trades when needed."
That meant I’d probably need to meet with the Department Head directly and discuss it.
"Then are you giving up on the domestic stock market for now?"
"Until we get approval, shouldn’t we continue trading in the domestic market?"
"Then, Team Leader, how about lowering the investment amount for now..."
"Do we automatically get investigated just because we’re being monitored?"
"Not necessarily. Unless we do something like dump volume right before closing, like during the old stock manipulation cases. Or funnel over 10% of volume into one stock. But even if we split the 250 billion into smaller buys, it's still from the same account, so we’ll be reported."
I nodded and gathered the stocks recommended by the Research Department, then started touching each one with my pen.
‘Something about this one feels... off.’
Then this one’s a pass.
‘This one feels definite.’
Then this one’s a check.
Just like the Research Department said, if Greece defaults, I would take short positions on the stocks that would fall, and long positions on those expected to rise.
"Um... how should we split the amounts?"
This was the most difficult part.
Dividing the investment amount.
How much should we divide it to avoid market disruption and not get smacked by our friends at the Financial Supervisory Service?
To be honest, even the team members here couldn’t say for sure.
"One moment."
Would this work too?
Half-doubtful, I tried writing down an amount next to the stock.
"......."
No sensation.
Then, just add a little more?
"......."
Still nothing.
Then double it?
"......!"
A sharp current flowed through my body.
So this is the appropriate price?
"For HT Motors, use this much."
"Th-this much? At that level, won’t the KRX definitely...?"
"Tsk. Deputy Manager Ahn, are you daring to question the team leader’s instructions? Then can you determine the split amounts yourself? Just barely enough to stay off their surveillance network?"
"...Sorry."
"Team Leader, please proceed with the next one."
I continued writing the numbers.
This much here, that much there.
It took some time to find the proper amounts, but the team members waited patiently.
To them, I probably looked like a scam artist casually pointing at random numbers.
"When the market opens, place the buy orders exactly like this. In the meantime, I’ll go meet the Department Head. As for when to sell... I’ll decide that after the buys are complete."
"Yes, sir."
I left the documents with the team members and headed to the Department Head’s office.
Come to think of it, this was the first time I was meeting the Department Head alone.
***
"......."
After Team Leader Jung Jin-ho left, the team members gathered around the paper he had left behind.
Just what could these numbers mean?
Various amounts were written down, and there was a dot under each one.
"Doesn’t this look like some kind of formula?"
"Yeah, I can’t figure out the pattern."
"Is this the algorithm that only the team leader can see?"
In other words, this might be the formula containing Team Leader Jung Jin-ho’s investment secret.
The problem was, no matter how hard they looked, they couldn’t figure out what kind of pattern or meaning these numbers had.
"Hah. It really does seem like there’s some incredible formula written here."
"But honestly, doesn’t it look like he just wrote the amounts up and down randomly?"
"So you’re saying our team leader just eyeballed the numbers and picked them at random?"
"Well... no. I’m sure there’s some secret formula hidden in there."
The team members soon exchanged glances.
"Should we each make a copy of this? We might be the first ones to ever see the team leader’s investment formula in numbers."
"Yeah. Good idea."
"I’m keeping mine as a family heirloom for life."
"I’ll try decoding it whenever I get a chance."
They treated the paper like they’d discovered some kind of precious treasure, until reality suddenly hit them.
"But no matter how you look at it, the amounts seem kind of risky..."
The default aside, the specified amounts looked somewhat precarious.
Especially since Jung Jin-ho said he would be doing short-term trading with these split amounts.
If he made a wrong move, the Financial Supervisory Service was sure to raise questions.
Even without that, one slip-up could cause them to lose everything they had earned so far.
"What can we do? We’re already in the same boat. If we die, we die together. If we live, we live together."
The Manager pulled together the wavering minds of the team members.
Thanks to that, they managed to hold on to their shaken resolve.
"We trust only the team leader. One more time, abandon your ego."
"Yes, sir!"
"Then everyone dismiss! Go get ready!"
Indeed, when the heart is in turmoil like a storm, the power of faith is what gets you through.
***
Prop Trade Department, Department Head Lee Tae-ho was all over the place due to the chaos caused by the China shock.
"Who’s here?"
"Team Leader Jung Jin-ho from Prop Trade Department Team 7."
"...?"
Currently the most talked-about figure at Kwangwoon Securities.
A monster who earned a massive fortune by investing 50 billion won in the middle of a major downturn.
He was also a parachute hire who had the CEO’s full trust.
"O-oh, tell him to come in... No, let him in right away."
"Yes, sir."
The Department Head stood up without realizing it.
Strange.
The person was clearly lower in rank, yet he found himself being overly polite.
That was probably because of the background support, but more importantly, the amount of money Jung Jin-ho had made.
In a securities firm, the hierarchy is determined by returns.
"Department Head, good morning. Sorry to bother you so early."
"Ahem, ah no. If it’s you, Team Leader Jung, I can always make time. Have a seat. Would you like something to drink?"
"No, the market will open soon, so I’ll keep it brief and head out right away."
The Department Head was relieved.
He felt strangely tense in front of Jung Jin-ho.
"So, what is it?"
"Our Team 7 plans to manage the entire 250 billion this time."
"What!? A-all of it!?"
"Yes. The problem is, I don’t think that amount can be handled solely in the domestic market, so I’d like to pivot to FX. But I’ll need permission for that..."
If you’re going to move 250 billion at once, aiming at the overseas market was definitely the right move.
"But why FX? I mean... with 250 billion, you could take the month off, couldn’t you?"
"Well... it didn’t feel right to sit idle. I’d like to try investing in the euro this time."
"Euro? Wait. Because of Greece?"
"Yes. If you open the account, I plan to allocate the funds toward the euro."
"Long? Or short?"
"Most likely short."
A short position on the euro?
That meant he expected the euro to fall.
But wasn’t the euro actually rising right now due to the China shock?
And yet he’s saying he’ll short the euro.
"Don’t tell me you..."
At that moment, a thought flashed across Lee Tae-ho’s mind.
"You think Greece is going to throw its hands up?"
As in, say they can’t pay the money, declare default.
"Yes."
Lee Tae-ho looked into Jung Jin-ho’s eyes for a moment.
His eyes were filled with conviction.
But Greece defaulting? Seriously?
That was absurd!
He almost grabbed the back of his neck there.
"Doing FX means... are you saying you’ll do short-term trading with the entire 250 billion?"
"Yes."
He almost grabbed the back of his neck for the second time.
‘This crazy bastard!’
Under normal circumstances, he would have told him to stop spouting bullshit.
But Department Head Lee didn’t make a hasty judgment.
The man before him was a monster who had predicted the China bubble in advance and earned hundreds of billions.
There might really be a basis for his judgment.
"...It’ll take a bit of time to open the FX trading account. But I’ll make sure to get it set up as quickly as possible."
"Yes. I'll be waiting. Thank you, department head."
As Jung Jin-ho gave a slight bow and walked out, Lee Tae-ho could only stare blankly.
How in the world was he supposed to report this to upper management?
"Some crazy bastard is trying to do short-term trading with hundreds of billions?"