I Became the Youngest Daughter of a Chaebol Family-Chapter 15: Plaza Accord (1)
September 19th, 1985.
After school let out from elementary school, I ran straight to Daehwa Securities.
Honestly, I wanted to skip the whole week and leave my schedule wide open, but that was impossible because Grandpa would hate it.
Sometimes I could get away with missing one important day, but for the most part, I still had to go to school.
– Click.
When Lee Si-hyun opened the door for me, a kind-faced man wrestling with a mountain of documents came into view.
It was Ha Joo-seong, the Executive Director of Daehwa Securities. He gave a slight smile and bowed his head to me.
“Young miss, you’ve arrived.”
“Yeah, I’m here.”
I picked up one of the scribbled papers and skimmed through it. It was a formula for calculating the price of an option.
“This is a down-and-in call option, right?”
It was a formula representing an option that turns into a regular call option if the exchange rate drops to a certain level (the barrier).
A look of surprise appeared on his face. He must have thought I only knew the concept and not the detailed workings.
“I always knew you were a genius, young miss... but do you really understand it?”
A reasonable question. Even if someone’s a genius, they can’t know everything. Especially since absolute time is hard to overcome.
But a genius, at least when it comes to a field they’re interested in, is an expert regardless of age.
That’s why I could answer without hesitation.
“I looked over all the material you sent me and studied a bit more. If you modify the Black-Scholes model based on exchange rates and the barrier option assumptions, it ends up looking something like this.”
The Black-Scholes model is so famous it’s called the F = ma of financial engineering. You get it by running differential equations and normal distribution formulas.
Among the many variations of the model, I couldn’t find a single formula for pricing foreign exchange options, but since I learned it in my past life, I could derive it again.
Apparently, it’s not that well-known at this point in time.
“Ah, yes. That’s correct. It’s the Garman-Kohlhagen model. The paper came out in ’83, but somehow you came across it.”
So that’s when it came out?
Even with perfect memory, I couldn’t know what I never learned, so I hadn’t known that. No wonder I couldn’t find it anywhere.
“Well, I am a genius.”
Though I was a little surprised on the inside, I smiled lightly as if nothing was out of the ordinary and sat on the plush sofa. As I stretched out my small legs, Si-hyun brought over a cushion at just the right time and placed it under my legs.
“So, did you buy the options?”
I flipped through some documents half-heartedly before giving up and just asked directly.
“Yes. We purchased about 50 million won from the Wall Street Dreyfus Fund... and brought in a small amount held by Sony. We bought roughly 80 million won worth total.”
“Tsk. It would’ve been better to wait until maturity before buying... a bit disappointing.”
Nom.
I clicked my tongue in dissatisfaction and unwrapped a piece of candy.
“There was no helping it. The maturity dates for all the forex options are different... and once you factor in barrier options, there really weren’t many available.”
I get it. That’s exactly why I only put in a billion won.
“Hmm, but looking at the books, there are a lot of options purchased, no?”
I tilted my head while sucking on the candy.
– Rustle.
I casually tossed the candy wrapper to Si-hyun and unwrapped another piece. As expected, chocolate flavor is better than strawberry.
My taste has become that of a little kid lately, and I live on candy every day. Good thing I’m a TS invincible beauty with cavity-proof teeth, really.
“Ah... those are options I bought under the company’s name. I’m still an executive director of a securities firm, after all.”
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I skimmed the portfolio roughly—looked like he picked up some safer quantities.
“Well yeah. It’d be awkward to approach a major client and only offer to trade a few tens of millions. So you lumped it all together, then passed along only the options I asked for, right?”
Working with smart people really is comfortable.
“Yes, that’s right. Haha, it’s really easy working with someone as sharp as you.”
Oh.
Looks like talent really does recognize talent. I was almost touched just now.
“Hearing you talk, young miss... I came to believe this position was the right one for me too. Honestly, if I didn’t believe you at all, I wouldn’t have bought the options.”
That’s a bit unexpected.
“Really? Even though I saved you from getting fired?”
“Even so, I’m a fund manager, and now an executive director. I can’t make decisions that would harm the investor. Isn’t that the rational way to think? If my judgment is correct, then you avoided risk too, young miss. And if I’m wrong, then maybe it’s just time for me to retire.”
Fortunately, it doesn’t seem to be time for retirement yet—
Ha Joo-seong smiled, his plump face lighting up slightly.
“Good. I’ll show you that your judgment was right.”
I returned his smile with one of my own.
After that, I spent some enjoyable time with the man. It sounds suspiciously suspicious, but it wasn’t wrong.
We calculated option prices, adjusted volatility, plugged formulas, and even chatted about how the Plaza Hotel would end up in Trump’s hands three years from now...
It felt nice to be back on the ground again.
Ah, this is life.
Back when I rotted away like a shut-in in my past life, I used to think that kind of life was good enough...
But I guess gold runs through my veins instead of blood.
“Alright! That’s it for today. No matter how much we do here, we’ve already bought the options, right? Let’s meet again later. I’ll find a way to skip school on Monday, so we’ll talk more then.”
I clapped my hands, wrapping up the day’s business. Even though I grow fast, I’m still a kid, and I was running on a sleep deficit.
Ugh. Already sleepy.
Feeling lazy, I got carried to the car on Si-hyun’s back. After that... I must’ve fallen asleep in the car.
Because when I woke up, I was already home.
This translation is the intellectual property of Novelight.
***
On September 20th and 21st, we couldn’t meet with Executive Director Ha Joo-seong either, since he was busy with the Witches’ Triple Day. Instead, we met again at Daehwa Securities on Sunday the 22nd.
Passing through the quiet company office—appropriate for a Sunday—I entered the room where Executive Director Ha Joo-seong was waiting.
He greeted me warmly and handed over another document. Upon reading it, I saw it was a dollar put option.
“I filled in the remaining 20 million won. By the way, seeing you again after two days, young miss, something feels different, hoho. Did you grow taller already?”
Really?
I stood on tiptoe in front of the mirror and tilted my head. I did feel a bit taller...
Thanks to this reincarnated body, I was ahead of my peers in physical development, but I was still just a kid—so I puffed out my cheeks and turned my head away.
“Eh, whatever. I’ll grow on my own.”
Lee Si-hyun, apparently worried about how hard I’d been working lately, leaned in and whispered softly into my ear.
“Young miss, you need to sleep early if you want to grow. Aren’t you planning to stay up all night tomorrow?”
“It’s not that serious. I’m just going to stay up until midnight, that’s all. Because of the maturity.”
Thanks to that, I took a nice nap yesterday. And today too, I slept in late.
Since we acquired options from multiple sources, there was one more headache to deal with.
The problem was, the maturity benchmarks were all different.
“Basically, I matched most of them to the London cut... but there are some New York cut ones, and the ones from Sony are Tokyo cut.”
Options, depending on type, have different standards for maturity. The global standard is the New York cut, London cut for European-style options, and Tokyo cut sometimes used in Asia.
Usually, just knowing the New York cut is enough. But foreign exchange options mostly use the European style, so this time most were London cut.
Also, since they’re tied to the value of the yen, some were Tokyo cut too.
For reference, based on Korean local time: Tokyo cut is at 10 a.m., New York cut is 12 noon, and London cut is midnight—00:00.
Thankfully, Ha Joo-seong handled ★ 𝐍𝐨𝐯𝐞𝐥𝐢𝐠𝐡𝐭 ★ it well and pushed the early-maturing Tokyo cut options to the 24th. 10 a.m. maturity is a bit risky.
If it doesn’t fall to 215 yen by then, it’s a total loss.
“...What about the ones from Wall Street?”
“Those are London cut. The Dreyfus Fund is a major mutual fund, after all. They’d use the international standard.”
That’s good. If it’s set to midnight, the barrier’s a little lower, which means the payout will be bigger if it hits.
September 22nd. Today is the day of the Plaza Accord.
We couldn’t hide our nervousness and paced around the company.
“Phew, I’m nervous. They said they’d send local updates by fax, but...”
“How much time is left? Around ten minutes?”
Watching me stare obsessively at the screen, Lee Si-hyun gently lifted me up and set me down further back.
“You’ll ruin your eyes, young miss. Would you like some juice?”
“Tch.”
This felt different from when I got the news of the Aung San Mausoleum bombing two years ago.
As expected of the executive director of Korea’s wealthiest Daehwa Group, his office was fully equipped with a telex and Reuters monitor.
If you don’t know what those are, that’s fine. Just think of them as insanely expensive machines used in the finance world to get real-time updates from abroad.
– Bzzzzt.
Ah, it’s here.
“At the Plaza Hotel in Manhattan, New York City, the finance ministers and central bank governors of the G5 nations held a meeting...”
They agreed to reduce the value of the dollar through interest rate adjustments.
A sharp thrill ran down my spine. I suppressed the rising corners of my mouth and looked toward the exchange rate window.
On the blinking screen, the dollar/yen exchange rate was appearing.
USD/JPY: 235.3
USD/JPY: 235.2
USD/JPY: 235.1
USD/JPY: 235.0
Then, maybe due to the data overload, the screen briefly flickered and blurred before coming back.
Sitting closest to the computer, eyes wide open, Executive Director Ha Joo-seong let out a cheer of delight.
“It’s happening!!!”
USD/JPY: 234.6
The value of the dollar was falling.
