Seok-won, who had been closely observing Choi Ho-geun and his team's efforts through the monitor, leaned back in his chair with a satisfied expression.
"It's their first real trade, but they're not flustered — they're handling it well."
What pleased him most was that instead of blindly following the instruction to sell the KLCI futures at 650, they had taken a more proactive approach, adjusting prices to maximize profit.
He picked up his mug to take a sip of coffee but put it back down when he realized it was empty. Instead, he turned his attention to the futures trading screens for Hong Kong and Tokyo displayed side by side.
"At this pace, they should have no problem offloading the target volume."
Then he shifted his gaze to another monitor on the left.
[MYR: 3.06 (▲ 0.20)]
While hedge funds like Eldorado were launching a ferocious assault, Bank Negara Malaysia (BNM) was doing everything in its power to defend the ringgit, resulting in a fierce tug-of-war with the exchange rate hovering around 3 ringgit per dollar.
But with the ringgit under siege, foreign hot money was flooding out of Malaysia due to fears of exchange losses — causing the stock market to effectively collapse.
[KLCI: 941.23 (-136.51)]
With the index nearing a 150-point plunge, Seok-won stroked his clean-shaven jaw, frowning slightly.
"The drop is too steep from the start, even more than expected."
This level of fear in the market could eventually interfere with their plan to profit from the KLCI futures.
While he watched with growing concern, the chart on his screen suddenly froze — as if the system had crashed.
"…!"
Seok-won instinctively looked at his Bloomberg terminal. Sure enough, a breaking news ticker was scrolling across the bottom of the monitor.
[Circuit breaker triggered in Malaysian stock market due to excessive drop!]
"Damn. So it's come to this."
He clicked his tongue and muttered in disappointment.
A circuit breaker is a measure used to temporarily halt trading in stock or futures markets when prices drop too steeply, to calm panicked investors.
"But in a situation like this, halting trading for a few minutes won't do much to stop the panic selling."
In fact, triggering the circuit breaker might even intensify investor fear, leading to an even worse sell-off once trading resumed.
Tapping his fingers on the wooden desk, Seok-won murmured:
"At this rate, it'll be hard to make the big profit we were expecting from the KLCI futures."
Just then, the phone rang, and he picked up the receiver.
[Sir, the Malaysian market just triggered the circuit breaker — trading has been suspended.]
"I saw it."
Leaning back in his chair, Seok-won replied calmly.
[Damn circuit breaker kicked in, and all the buy orders vanished — we can't get any more trades filled.]
Choi Ho-geun's voice came through, strained with tension. Realizing he had cursed, he quickly apologized.
[I got carried away… I'm sorry.]
"It's fine. More importantly, how many contracts have been executed so far?"
Choi Ho-geun answered immediately.
[Between Hong Kong and Tokyo, we've executed just under 3,000 contracts.]
"Still, that's a decent number filled in the meantime."
[But it's still far from our target.]
"For now, keep selling as many KLCI futures as possible. If it becomes too difficult, we'll switch our target elsewhere."
Choi Ho-geun's voice, full of anxiety, now carried a note of curiosity.
[If we're switching targets… where to, exactly?]
With the phone still to his ear, Seok-won moved his mouse and brought up a new stock screen before continuing.
"We'll short the stocks of Japan's top four securities firms."
[What?]
Choi asked again in shock.
[You mean Nomura, Daiwa, Nikko, and Yamaichi Securities?]
"Exactly. You know them well."
As some of the top firms not only in Japan but across Asia, it would have been impossible for anyone in the industry not to recognize them.
[But those are major stocks listed on the Nikkei Index. Isn't it way too risky to short them?]
At that, Seok-won smiled deeply.
"It's fine. Very soon, all four of their stock prices are going to swing hard. If we move in and out at the right moment, we'll make a nice profit."
[Is there some hidden bad news I don't know about?]
"That's right."
His calm and confident response made Choi fall silent for a moment, before carefully asking again.
[Could you tell me what this bad news is?]
"Not long from now, they'll each report operating losses of about $1 billion."
[What? Is that for real?]
"Yes. It hasn't been disclosed yet, but all four firms have already locked in losses of $1 billion each."
Choi paused, trying to process what he'd just heard, then exclaimed:
[Wait — you're saying the total loss isn't $3 billion combined, but each company will lose $1 billion?]
"That's right."
Choi let out a breath through clenched teeth.
Even for massive firms like Japan's Big Four, losing $1 billion apiece — not yen, but dollars — would inevitably send shockwaves through their stock prices.
[…If that really happens, it'll have a serious impact on their shares.]
"If the Japanese market were doing well, it might blow over easily. But with investor sentiment already shaken by the strong yen, this kind of news will hit even harder."
[People are already nervous, so I suppose it would only magnify their fears.]
Choi nodded in agreement but suddenly looked puzzled as a thought struck him.
[This kind of insider info must be extremely confidential… How in the world do you know about it?]
Seok-won responded casually.
"Because I'm the one who made a profit through an options contract with those four firms."
[…]!
Stunned, Choi couldn't hide the shock in his voice.
[Y-you signed an options deal with them? What do you mean by that…?]
"Last year, I placed CDS option contracts worth a billion dollars each on the Thai, Indonesian, and Korean stock markets."
The sound of Choi Ho-geun swallowing hard came clearly through the receiver.
Unbothered, Seok-won shrugged his shoulders and continued.
"As you know, the Thai SET Index fell below 600 due to the aftermath of the baht crisis. That triggered one of the options, as it met the contract conditions."
[Y-you mean you made four billion dollars from that option contract?]
"You got it. And if the other two options get triggered too, that'll bring in an additional eight billion dollars."
Choi was so stunned that he could barely form words.
Not only was it shocking that someone had made such massive option contracts in the first place, but the fact that he had called it right and pocketed such enormous gains left him speechless.
At the same time, another thought crossed his mind: maybe Seok-won had anticipated this financial crisis in Thailand and the rest of Southeast Asia long before it happened — and had laid the groundwork accordingly.
Otherwise, no rational person would ever take such a gamble.
'The Japanese securities firms must've also thought it was impossible, which is why they agreed to the options in the first place.'
Now it made sense why Seok-won had told them to realize gains from the Korean stock market last year and convert all operational funds into dollars — it was all preparation for this very moment.
The realization sent chills down Choi's spine.
He couldn't help but admire Seok-won's brilliance and foresight, who had predicted everything and drawn up such a grand plan from the very beginning.
With a renewed sense of purpose, Choi Ho-geun responded with a much more proactive attitude.
[I'll go ahead with the short-selling of Japan's top four securities firms, as you instructed.]
"You'll have an easier time placing the bets if you get help from Eldorado Fund's Japan branch."
[Yes, I'll do that.]
After exchanging a few more words, Seok-won ended the call. He interlaced his fingers and looked at the stock tickers of Japan's top four securities firms displayed on the monitor.
"Since I was the one who signed the CDS options, if Eldorado Fund short-sold the stocks directly, it could create a headache later — so I've kept them out of it. But this works out even better."
Technically, Daehung Venture Capital was just like Eldorado Fund — both were his own holdings — so it was like covering his eyes and pretending not to see. A paper-thin disguise.
But if he carried out the short-selling through another foreign brokerage firm instead of Eldorado, made a profit, and pulled out, even if people eventually discovered that Daehung Venture was connected to him, there wouldn't be much they could do about it.
"Still, just in case, I should set up a paper company in the Cayman Islands and tell them to make the investments through that."
This kind of trick — using tax havens and paper companies — had become a common tactic among foreign hedge funds. Since the IMF crisis, even the Korean government and domestic firms had been repeatedly blindsided by these schemes, fully aware but helpless to stop them.
While he was organizing his thoughts, the cell phone on the corner of his desk rang.
When Seok-won picked up, he heard the familiar voice of Porter, the head of the Japan branch.
[It's Porter. Boss.]
"I was just about to call you — perfect timing."
[Have you already heard the news?]
Porter sounded surprised and urgently asked,
Sensing something unusual, Seok-won furrowed his brow slightly.
"News? What do you mean?"
[I'm talking about the announcement just made by the Indonesian central bank.]
Seok-won quickly adjusted the phone in his hand.
"This is the first I've heard of it. Did something happen in Indonesia?"
Porter didn't hesitate to deliver the breaking news.
[The Indonesian central bank just announced that it's expanding the currency band from 8% to 12%.]
Caught off guard, Seok-won sat upright and asked in haste,
"Are you serious?"
[Yes. It's breaking on Bloomberg right now — you should check.]
With the phone still pressed to his ear, Seok-won turned his head toward the Bloomberg terminal set up at the corner of his desk.
Sure enough, the headline about Indonesia's central bank expanding its currency band was running across the screen.
Seeing that, Seok-won let out a low chuckle of disbelief.
"Huh. That was a punch I didn't see coming."
After watching countries like Thailand collapse one after another under the attacks of currency speculators, Indonesia's government had decided to strike first — before becoming the next target.
So far, hedge funds had been exploiting the fact that many countries had effectively pegged their currencies to the dollar by setting narrow exchange rate bands. That had been their main vulnerability.
'But if they widen the currency band themselves, it becomes a lot harder to attack.'
If the band was already loose, then even a forceful assault on the Indonesian rupiah wouldn't yield much profit.
"It's like they wounded themselves first so no one else would bother trying."
Shaking his head, Seok-won muttered.
[So then, doesn't that mean the Indonesian stock market might not fall as much as we were expecting — or might even hold its ground?]
"Hmm."
Seok-won frowned and let out a low grunt as he recalled the details of the CDS option contracts he had signed with the top four Japanese securities firms.