September 12, 2001.
In the aftermath of the worst terrorist attack in U.S. history the day before, the stock market was scheduled to open at noon, later than usual.
Even so, investors who had heard the news flooded into the brokerage halls in Yeouido from early morning, packing the place until there was barely room to stand.
With a market crash expected from the terror shock, they had rushed in, desperate to sell their stocks before anyone else.
As if to show just how deeply fear had settled over the market, investors crowded around the service counters and thrust forward sell orders even though the market hadn't opened yet.
"Sell everything in my account at the opening price!"
At the middle-aged man's demand, the female clerk glanced at the order slip and replied,
"If you sell now, your losses will be quite large. Are you sure you want to go through with this?"
"If I hold on, who knows how far it'll fall. I need to dump it now. Just sell everything!"
"Yes. Understood."
The clerk nodded helplessly.
"I've entered the order, but there's so much sell volume that it might not be executed immediately."
"What? You're saying it won't sell even at the opening price?"
When the man snapped angrily, the clerk answered awkwardly,
"As you can see, there are just too many people trying to sell."
"Damn it. That's ridiculous!"
Unwilling to hear any explanations, the man stubbornly insisted that his stocks be sold immediately.
"No matter what, sir…"
As the argument dragged on, curses started flying from behind.
"Hey, do you own this counter or what?"
"We need to place our orders too! If you're done, move!"
"Drag that guy out of here!"
With tempers flaring, people shouted and pointed.
Sensing a fight might break out at any moment, the middle-aged man grimaced and finally stepped away from the counter.
After the chaos subsided, and as the opening time drew closer, investors began gathering in front of the large market display board mounted on one side of the hall.
"Please… please…"
A middle-aged woman with permed hair clasped her hands together as if in prayer.
Several men stood nearby with cigarettes in their mouths, staring at the market board with anxious, piercing gazes.
"Damn… there's not a single buy order. It's nothing but sells."
A man in a floral shirt checked his terminal and let out a deep sigh.
"Even during the opening call auction, everything's looking at a drop of over ten percent. What the hell are we supposed to do?"
"Hmm…"
A man wearing a fedora, an economics newspaper tucked under his arm, stiffened as he muttered under his breath.
"Shit. If I'd known this would happen, I would've sold everything yesterday."
The man in the floral shirt raked his short hair in frustration.
"The market mood was good just yesterday. Who would've imagined something like that happening in the U.S.?"
"I thought it would keep going up, so I even used margin to buy more stocks. This is driving me insane!"
The man in the fedora was no different. After seeing the market rise following the full repayment of IMF loans, he had gone all in hoping to score big, and now he couldn't hide his growing panic.
As time passed, the moment of opening finally arrived.
Dozens of pairs of eyes turned toward the large market board at once. The trading floor fell into a deathly silence, broken only by the sound of people swallowing dryly.
Tick. Tick. Tick.
The clock hand pointed exactly to noon. The opening bell rang, and the frozen numbers on the board began to move rapidly.
"Aaaah!"
"My God… is all of that sell volume?"
"How can there be that much?!"
Panic erupted right from the opening call auction as an overwhelming wave of sell orders poured in.
Across both the KOSPI and KOSDAQ, nearly every stock plunged. The massive market board turned completely blue.
They had expected bad conditions, but watching the index plunge more than sixty points in an instant sent investors into sheer terror.
"H-how is this possible? It's already down ten percent!"
"This can't be happening…"
As their stocks plunged, some people screamed while clutching their heads with both hands, and others lost all strength in their legs and collapsed onto the trading floor, utterly stunned.
Then, suddenly, the numbers that had been plunging downward at a terrifying speed came to an abrupt halt, as if by magic.
"What's going on?"
"The drop stopped."
"W-why did it stop?"
Confusion spread across the faces of investors who had been flailing like people trapped in quicksand.
It wasn't until they noticed that, just two minutes after the market opened, the index had already fallen by a staggering sixty points that they realized why.
"The circuit breaker's been triggered."
"Are you kidding me? How much did we just lose in a matter of minutes?"
As the shocking realization sank in, the investors' faces turned as blue as the market board itself.
Seeing most stocks locked at their daily lower limits, everyone stared on in disbelief.
In less than five minutes, investments worth hundreds of thousands to millions had quite literally melted away, leaving nothing behind. There was no way not to feel hollow.
And yet, knowing that this wasn't the end, that the nightmare was only just beginning, left the investors utterly dazed.
***
With the market plunging so violently that a circuit breaker was triggered just two minutes after the opening, halting trading for thirty minutes, the damage hit not only the spot market but the futures market as well.
Yamada Tsutomu, chief trader at Nomura Securities' Korea branch, watched trading resume after the circuit breaker was lifted—only for a sidecar to be triggered less than a minute later, suspending program trading for five minutes. He spat out a harsh curse.
"Chikushō (ちくしょう)!"
With futures and options expiration just around the corner, he had sold September 62.5 put options. Thanks to an unforeseen terrorist attack, their prices were now skyrocketing vertically.
"The September 62.5 put option price is surging! It's already over 50,000!"
"Buy orders are flooding in from everywhere, but there's no supply at all!"
"Damn it! It just broke through 60,000. Now it's at 61,500!"
At the traders' frantic shouts, Yamada twisted his face in agony and let out a groan.
Just three days earlier, he had sold those options for 1,000 won per contract. Now they were worth 61,500 won—more than sixty-one times higher. It was enough to drive anyone insane.
The losses were already enormous, but the bigger problem was that they were still ballooning by the second.
If this continued, when the contracts expired tomorrow, he would be forced to buy back the options he had sold—at grotesquely inflated prices—and settle at a massive loss.
Standing with his arms crossed, Yamada turned his head toward a trader seated at the desk to his left.
"How many contracts did we sell?"
"Seventy-five thousand contracts of the 62.5 put option."
Yamada stared up at the ceiling and let out a hollow laugh.
"This is madness."
He had hoped to make a mere 75 million won, only to be staring at a loss of 4.6125 billion won—more than sixty-one times larger. There was no way his frustration wouldn't boil over.
Still, he couldn't afford to just stand there raging.
He wasn't the only institutional investor trapped after selling put options. Many others were in the same bind, and if he wanted to reduce the damage even slightly, he had to act fast.
"Buy up every last September 62.5 put option you can find. Now!"
At that, Inamura Tatsuo, the senior trader Yamada had specifically brought with him to Korea, answered with a face drained of color.
"There's nothing available. There are no put options left on the market at all!"
"Damn it! Our losses are snowballing every second—are you saying we just sit here and do nothing?"
Yamada snapped in irritation, raising his voice.
"Th-then what do you expect us to do when there's no supply?"
Yamada shot Inamura a frustrated look as he asked in confusion.
"Who would put options up for sale in a situation like this? If we sold the options, someone must have bought them."
"Then… Bluehole Venture Capital?"
"That's right. Everyone in the market knows those bastards swept up all the September put options. Call them. I don't care if you have to get down on your hands and knees and beg. Get those contracts back!"
"Y-yes! Understood!"
Inamura hurriedly flipped through his card holder, found the contact information, and called Bluehole Venture Capital's asset management division.
Biting his nails, Yamada watched him with an anxious expression.
He desperately hoped this would work, but after holding the receiver for a long while, Inamura glanced over nervously and spoke carefully.
"It just keeps ringing. No one's answering."
"Damn it!"
Yamada cursed loudly.
"Keep calling until they pick up! Unless they've pulled the lines entirely, they'll answer eventually."
"Yes."
Inamura replied and tried again.
At that moment, another subordinate jumped to his feet, his face drained of color, and shouted,
"The September put option price has surged to 100,000!"
As the losses ballooned by another 2.8875 billion won in an instant, Yamada slammed his fist down on the desk.
"This is insane!"
With sell orders completely locked out, the order book was now packed solely with desperate buy orders from institutional investors trying to purchase put options at any cost.
Staring at the trading screen as prices continued to skyrocket, Yamada bit his lip until it bled.
"Inamura! Still no connection?"
He shouted at Inamura, who was holding the receiver, and Inamura answered through a sheen of cold sweat.
"No. I keep calling, but they're not picking up."
Yamada ground his teeth.
"Looks like they've decided to hold everything all the way to expiration tomorrow."
If there had been more time left until expiration, that might have been one thing. But with a panic-stricken market, there was virtually no chance things would stabilize within a single day. If he were in their position, he would have done the same.
The problem was that if it continued like this, the losses would grow even larger, potentially blowing past ten billion won. With his face twisted in frustration, Yamada glared at Inamura, who was still desperately dialing.
"Whatever it takes, get in touch with Bluehole Venture Capital and buy those contracts back!"
Inamura knew how unreasonable the demand was. If the other side had made up their mind not to answer, there was no real way to force the purchase of those put options.
Still, he couldn't bring himself to say that outright.
"Y-yes, sir."
Left with no choice, Inamura clung to the unresponsive receiver and kept calling.
Not only Nomura Securities' Korea branch, but every foreign and domestic institutional investor who had sold put options was now desperately trying to contact Bluehole Venture Capital to buy back their positions.
And yet, not a single one of them succeeded.
***
Late at night.
Seok-won was on the terrace of the Plaza Hotel penthouse, speaking on a satellite phone with Porter, the branch manager in Japan.
[The Nikkei closed at 9,610.10, down 682.85 points from the previous day.]
The cityscape spread out below the terrace lay subdued, stripped of its usual vitality.
Listening to the nonstop wail of sirens echoing in the distance, Seok-won replied in a calm voice.
"So the ten-thousand level finally gave way."
[Yes. This is the first time in seventeen years, since August 1984 when the bubble economy began, that the Nikkei has fallen below 10,000.]
"At this pace, we also need to prepare for the possibility of the 9,000 level breaking."
[That concern is already spreading among market participants.]
"With the situation in the U.S. deteriorating by the hour, investor sentiment can only keep shrinking."
[The surge in put option prices we bought due to the index crash is good news, but since this drop was caused by a terrorist attack with countless casualties, it's hard to feel happy about it.]
Porter sounded bitter.
"I feel the same. But we can't let an opportunity that's already in our hands slip away. As instructed, hold the September put options all the way through settlement and maximize the profit."
[Should we do the same with the October contracts and carry them through to settlement as well?]
"No. Sell the October contracts at an appropriate price."
At that, Porter asked, sounding surprised.
[Wouldn't it be better to just hold on until expiration?]
"The initial shock will drive prices down sharply, but there's a strong chance of a rebound before long. It's better to unload the October contracts before they expire."
In the midst of a global panic, it was hard to be certain that the stock market could shake off the shock and recover quickly. Still, since this was Seok-won's directive, Porter raised no objections and accepted it.
[Then I'll proceed as you say.]
After issuing a few more instructions and ending the call, Seok-won lowered the satellite phone and put a cigarette to his lips.
He flicked the lighter and lit it, drew in a deep breath of white smoke, then slowly exhaled as he gazed calmly at the Manhattan skyline lying submerged in darkness.