September 13, 2001.
Ahead of the market opening, the trading floor of Sasung Securities' futures sales team was enveloped in suffocating tension.
Just two days earlier, a massive terrorist attack in the United States had sent option prices into extreme turmoil, and now it was the day of the double witching, when futures and options expired simultaneously.
Na Jeong-hwan, head of the futures sales team, stared at the four monitors lined up in front of him with bloodshot eyes, biting down hard on his lower lip.
Only two days ago, the 62.5p and 60p put options had carried premiums of just 0.01. Now, in the span of a single day, their prices had gone berserk, skyrocketing by 504 times and 300 times respectively. It was enough to drive anyone mad.
If he were to close out the put options he had sold right now, the loss would amount to a staggering 18.625 billion won.
What was supposed to be a bet to earn 45 million won was now threatening to come back as a loss nearly 280 times that size, leaving his insides feeling scorched black.
Na Jeong-hwan ran a hand over the rough stubble on his chin, having not even had time to shave, and called out to Assistant Manager Woo Chang-wan, who was seated to his left.
"Manager Woo."
"Yes."
Woo Chang-wan, whose eyes were just as hollow from an all-nighter, awkwardly straightened up from his slumped posture over the monitors.
"Still no word from Bluehole Venture Capital?"
At the question, asked in a dry, strained voice, Woo Chang-wan hesitated before answering.
"...Yes. We've been trying to reach them since yesterday, but they're not answering their phones. It's not just us—other firms haven't been able to make contact either."
"So what, we're just going to sit here and do nothing?!"
Na Jeong-hwan shouted angrily.
"I-I'm sorry."
As Woo Chang-wan shrank back and lowered his head, Na Jeong-hwan twisted his face in irritation.
At that moment, one of the subordinates cautiously spoke up, gauging the mood.
"Five minutes until the market opens."
"Tsk."
Clicking his tongue, Na Jeong-hwan ground his teeth again and pressed him harshly.
"If these options get settled as things stand, the losses will exceed 18.5 billion won. Are you going to take responsibility for that, Manager Woo?"
"..."
"If you don't want to hand in your resignation and get kicked out of this company, then find a way to get in touch with them, no matter what it takes!"
"...Yes."
With his head bowed deeply, Woo Chang-wan barely managed to reply in a voice that sounded like it was crawling out of his throat.
Avoiding the contemptuous stares, Woo Chang-wan returned to his seat, let out a small sigh, and muttered under his breath.
"Fuck."
The decision to sell the put options had been discussed and approved in a department meeting, yet now all the blame was being dumped on him alone. The sense of injustice surged up inside him.
'If they've decided to clutch the contracts and never let go, what the hell am I supposed to do?'
Feeling stifled, Woo Chang-wan loosened his tie with one hand.
Truth be told, he was just as frantic as Na Jeong-hwan.
If the worst-case scenario played out and the market kept crashing through today without being able to buy back the sold put options, he really might end up having to submit his resignation.
"I'm going to lose my mind."
Raking his hair roughly, Woo Chang-wan picked up the receiver again, dialed the number he had already called hundreds of times and practically memorized, and tried Bluehole Venture Capital once more.
But again, all he heard was the ringing tone. No one answered, no matter how long he waited.
"Please… just pick up. Please…"
Holding the receiver to his ear, Woo Chang-wan shook his leg nervously under the desk.
Meanwhile, as the market opened and trading began, Na Jeong-hwan swallowed hard and stared intently at the monitor in front of him.
[KOSPI : 486.93 (▲11.33)]
As institutional buying flowed in during the opening call auction and the index rebounded, Na Jeong-hwan clenched his fist.
"Yes. This is it."
If the index continued to rebound like this, they could significantly reduce their option losses.
But that hope was shattered in less than ten minutes.
"W-wait…"
The index, which had seemed to bottom out and rebound on institutional bargain buying, quickly turned downward again under a wave of panic selling by foreign and individual investors.
"Foreigners and retail investors are dumping over 200 billion won worth of shares!"
"Even chemical and steel stocks that were holding up yesterday are sliding now, giving back all the gains since the opening!"
As traders' urgent shouts rang out one after another, Na Jeong-hwan's face crumpled mercilessly.
"B-breaking news! There's breaking news out of the U.S.!"
"President George Bush has declared the elimination of al-Qaeda, identified as the force behind the terror attacks. He reportedly warned that if there is no cooperation, Pakistan will be bombed back into the Stone Age!"
With the market already in terrible shape, President George's ultra-hardline remarks completely drained what little strength the index had left, sending it plunging straight down.
[KOSPI : 446.46 (▼29.14)]
The trading floor, which had briefly been lifted by a flicker of hope, was instantly filled with groans and despair.
Na Jeong-hwan, who had just been relieved that they might survive, now felt as if he had been dropped straight into hell. Stunned, he hurriedly leaned forward to check the trading screen.
"Damn it!"
Na Jeong-hwan sucked in a sharp breath, his face turning deathly pale.
In the blink of an eye, losses had exceeded 20 billion won.
"Buy the put options right now! Hurry!"
But the traders cried out in anguish.
"We're placing buy orders, but nothing is getting filled!"
"Everything that could've been sold was already traded yesterday. There's absolutely no supply left in the market!"
Occasionally, a sell order would appear like a bean sprout in a drought, but it vanished instantly as not only Sasung Securities, but other institutions trapped in put options all rushed to buy at once.
And even those rare fills were nowhere near enough to cover what they needed.
In the end, the only remaining hope was to secure contracts from Bluehole Venture Capital, which was holding massive quantities of put options.
Na Jeong-hwan whipped his head around and looked at Woo Chang-wan.
"Bluehole Venture Capital! Did you get through?"
But Woo Chang-wan, holding the receiver, weakly shook his head.
"They're not answering."
"Damn it."
Na Jeong-hwan dragged a hand down his face, utterly despairing.
"Looks like they've decided to hold everything through settlement. If I were them, with today being expiration and the market like this, I wouldn't sell put options either."
Even as he spoke, put option prices continued to surge relentlessly on the trading screen.
"Damn it! Just how high are they planning to go?!"
Woo Chang-wan was slumped in helpless despair when the phone lying on his desk suddenly vibrated.
Absentmindedly picking it up, his eyes widened when he saw the name on the screen.
Afraid the call might drop, he quickly hit the answer button.
"H-hello!"
[It's me. Can you talk?]
Recognizing the voice of Manager Jung, whom he knew personally, Woo Chang-wan gripped the phone tighter and blurted out,
"Do you have any idea how many times I called you? You didn't answer at all, and now you finally call back!"
[You're calling about the put options, right?]
Manager Jung Hwan-yeop replied in a relaxed tone.
It was a completely different mood from the side that was practically drying up from panic.
Woo Chang-wan hesitated for a moment, then gripped his phone and spoke in a pleading voice.
"Y-yeah. You guys are holding a lot of inventory, right? Sell some of it back to us."
[How much do you need?]
Woo Chang-wan quickly scanned the situation and answered.
"Twenty-five thousand of the 62.5p and twenty thousand of the 60p. Can you do it?"
Na Jeong-hwan, who had moved in close, silently mouthed a question.
Bluehole Venture Capital?
Woo Chang-wan nodded.
Na Jeong-hwan leaned in, his face taut with tension.
The other traders, who had been moving frantically just moments ago, now held their breath as well, watching him with hopeful expressions.
With all eyes on him, Jung Hwan-yeop spoke.
[We've got the inventory, but you know prices have jumped a lot, right?]
The smug tone grated on him, but since he was the one desperate right now, Woo Chang-wan lowered his head even further.
"Name your price."
[The buyer's the one who makes the first offer.]
After a brief moment of calculation, Woo Chang-wan spoke.
"How about premiums of 6.5 and 4.0, respectively?"
That was an increase of 604 times and 400 times compared to the closing prices just two days earlier.
But clearly unimpressed, Jung Hwan-yeop responded coolly.
[Come on. That's only slightly higher than the current market price.]
"Then what do you want?"
[Let's be clean about it. Add another 0.5 to each premium. Make it 7.0 and 4.5.]
"That's excessive, isn't it?"
When Woo Chang-wan frowned and pushed back, Jung Hwan-yeop responded with an air of complete indifference.
[You know the index is crashing because of the statement about bombing Pakistan, right? I called you as a courtesy since we know each other. If you think it's too expensive, there's nothing I can do.]
"You're ripping us off. How is this 'courtesy' in any sense?"
[That's how this business works. If you were in my position, would you hand over inventory at market price?]
Woo Chang-wan could only let out a pained groan, unable to argue further.
Na Jeong-hwan, who had been listening intently with a tense expression, silently mouthed a question.
'How much does he want?'
Without a word, Woo Chang-wan picked up a pen and wrote the proposed prices on a notepad.
"Hm."
After reading the figures, Na Jeong-hwan lowered his eyes and let out a low groan.
Accepting those terms would lock in put-option losses totaling a staggering 26.5 billion won. No wonder he hesitated.
That would wipe out the entire futures desk's profits for the quarter.
Unable to decide right away, Na Jeong-hwan suddenly turned his head and looked up at the large market board mounted on the wall.
It was still a sea of blue, the index continuing to plunge.
In direct contrast, put option prices were skyrocketing.
With almost no supply and a rush of institutional buyers scrambling to close positions ahead of expiration, prices were being driven even higher.
'If I hesitate any longer, prices might go up even more.'
The fear that premiums would continue to surge shook him deeply.
After agonizing over it, Na Jeong-hwan looked at Woo Chang-wan and gave a heavy nod, signaling him to accept the offer.
Woo Chang-wan let out a small sigh, then gripped his phone again.
"Fine. We'll buy at 7.0 and 4.5."
[Okay. Done!]
As if he had expected it, Jung Hwan-yeop spoke in an unhurried voice.
[I'll let Bluehole Securities know. Once the funds are confirmed, we'll transfer the contracts.]
"Fine."
Woo Chang-wan felt like he had aged ten years in the span of minutes.
[If you'd gone all the way to settlement, the losses would've been much worse. So don't hold too much of a grudge.]
"Yeah, thanks a lot."
Frowning, Woo Chang-wan ended the call.
Na Jeong-hwan immediately rushed over and demanded,
"How did it go?"
"They agreed to hand over the contracts once we wire the money to Bluehole Securities."
"That's a relief, at least."
Some of the tension drained from Na Jeong-hwan's face as he let out a breath.
"The losses are still huge. Will we be okay?"
When Woo Chang-wan asked cautiously, Na Jeong-hwan gave a bitter smile.
He then turned his head and gestured toward the put option prices, which had climbed even higher than before.
"There's no telling how big the losses could've gotten. At least we avoided the worst. All we can do now is pray this ends with disciplinary action and not outright dismissal."
Woo Chang-wan also stared at the stock index, which continued to sink deeper, his eyes heavy.
They had paid an enormous premium to buy back the options, but one way or another, the domestic institutional investors managed to close out their positions.
Foreign investors, on the other hand, were hit by yet another massive crash following the previous day's plunge. With the circuit breaker triggered once again, they were forced to settle their option contracts at even higher prices, swallowing the losses with tears in their eyes.
TL/n -
The phrase "bombed back into the Stone Age" was not publicly stated by President Bush himself.
It comes from a claim by Pervez Musharraf, Pakistan's military ruler at the time. Musharraf later recounted that U.S. officials—specifically Deputy Secretary of State Richard Armitage—warned Pakistan that if it did not cooperate with the U.S. against terrorism, it risked being bombed "back to the Stone Age."