The Natural Gas War (3)
All of this uproar had been set in motion for one simple reason: Lee Jaseung had been scratched.
Makers was ordinary?
His membership had no value?
Was that really so?
Attention locked onto him.
Just what was Lee Jaseung’s position?
What was the first investment he would reveal after stirring the membership controversy?
Lee Jaseung gladly introduced them to the stage.
“Lee Jaseung’s going into natural gas futures.”
“Huh? I heard Seonkang Group is too.”
“Including leverage, the real position’s two trillion won.”
“Huh? Seonkang Group’s the same?”
“Lee Jaseung’s going short.”
“Huh? Seonkang Group’s long, though.”
Same market. Same scale. Same timing. Completely opposite positions.
Could a matchup like that possibly be coincidence?
“……He went after them on purpose?”
“That would make him even more of a lunatic. Taking the opposite side just for the sake of opposing them.”
A brand-new firm and Seonkang Group were putting two trillion won on the table and facing off head-on.
Yeouido seethed. Excited brokers whispered among themselves.
“The scale’s insane. Someone please livestream this from the arena!”
“……Idiot, we’re players too. Not spectators.”
Two parties taking diametrically opposed positions?
One of them had to be wrong, and that was the crack traders could wedge themselves into.
Figure out who was right and simply ride their position—easy profits!
“Who’s going to be right?”
“Obviously Seonkang Group.”
It wasn’t blind faith in Seonkang Group.
The Seonkang chairman enjoyed gambling-style bets; he had won big before and lost big just as often.
This time, though, the case looked solid.
There were simply too many factors pointing to a price rise.
“First of all, it’s winter. Heating demand spikes in winter.”
Weather was the single biggest driver of natural gas prices.
Gas prices rose in winter. That was gospel.
On top of that, supply was shrinking.
“The U.S. approved a natural gas export project too.”
America was preparing to ship gas overseas.
If gas left the country, domestic volume inevitably fell.
Supply down, and finally demand itself was climbing.
“Tighter environmental rules are pushing power plants to switch to natural gas. Every single factor is bullish.”
Someone pointed out a counterargument.
“Couldn’t it still fall? There’s talk shale production will keep rising.”
“Sure, a drop is possible. But season, supply cut, demand surge—everything’s pointing one way. Up. To cancel out that upside you’d need shale production to double overnight.”
The logic was tight.
Most people accepted the analysis and never even glanced at Lee Jaseung’s short.
Yet there were always beasts who refused to be ordinary.
They sniffed around Jaseung’s position.
The returns on this side are way higher!
Bet with Seonkang Group and you might make thirty percent. But if Lee Jaseung is right…
At least a hundred percent!
Real high-risk, high-return.
The Commodity Futures Trading Commission published a report every Friday listing large positions.
Anonymous, of course…
“Holy shit. They’re dumping massive volume for two straight weeks! Has to be Lee Jaseung, right?”
“Who else would run a position this weird?”
……It might as well have been under his real name.
They shifted their eyes to the price chart.
The chart clearly marked the initial entry and the current price.
Entered at $4.90. Two weeks later the price stood at—
“$5.30!! That’s an eight-percent rise!”
In ordinary investing, eight percent might not be a catastrophic loss.
But they had already heard the rumor that Lee Jaseung was running seven-times leverage.
Gains were sevenfold. Losses were sevenfold too.
Not eight percent. Fifty-six percent.
“Insane.”
One trader’s voice cracked with shock.
“Half the principal gone in two weeks?”
Makers Office.
Late into the night, Gil Donggyu arrived at Makers yet could not bring himself to enter. He paced endlessly in front of the door.
Every time the natural gas price refreshed in real time, he jolted with it.
It went up again!
For two solid weeks the price had done nothing but climb.
They were short, so rising prices meant losses. That much risk they had accepted when they put the money in.
They just had never imagined the loss would be this size.
“Seventy billion…… seventy billion just…….”
Watching seventy billion won evaporate right in front of him, regret crashed over him.
If I’d followed Seonkang Group, how much would I have made by now?
Should I get the membership refunded? What was so great about it that I paid five billion to join! My five billion, my precious five billion!
I got played. Lee Jaseung completely played me.
He wanted to storm in right then, grab Jaseung by the collar, and shake him.
Yet he only hesitated at the door, never quite able to shove it open.
The sheer face he had to maintain held him back.
But then—
“$5.40!”
In that short interval it had climbed another ten cents.
Ten percent above entry.
Apply seven-times leverage: seventy percent loss.
In cash terms, eighty-four billion won had vanished.
No!!!!!!
Gil Donggyu wrenched the door open and stormed inside.
If it was going to be like this I should’ve just stuck with Seon Kangsik!
“If it was going to be like this I should’ve just stuck with Seon Kangsik!”
“???”
Had that been his own thoughts?
He glanced around, then headed toward the lounge. Someone was already there.
Han Juhyeong?
Han Juhyeong, face flushed deep red with drink, was sprawled across the sofa whining.
Gil Donggyu was speechless.
The guy who swaggered around saying Lee Jaseung was worth every won showed up before me?
Realization hit.
Ah! I got played by Lee Jaseung and by Han Juhyeong both. Completely double-played. If I keep taking this I’m a sucker, a total sucker!
He was about to charge between the two of them when—
“I’m going crazy. The price is still climbing right now! Do you even know what natural gas is at? $5.40!”
Han Juhyeong’s shout stopped him cold.
The exact words Gil Donggyu had wanted to scream were already pouring out of Han Juhyeong’s mouth.
Gil Donggyu froze.
Maybe I should wait a little longer?
Luckily the lounge had a thick marble pillar. He slipped behind it.
Then Lee Jaseung’s calm voice continued.
“We entered at this timing precisely because we expected the price to rise.”
“Huh?”
“A short position is fundamentally ‘borrow and sell, then buy back later to repay.’ The price has climbed too far already? Correct. That’s why we’re waiting. Waiting to sell at the peak.”
Wait. When you put it that way…
Gil Donggyu pricked up his ears.
Selling at the top does mean the bigger the subsequent drop, the larger the profit. Is this all part of Lee Jaseung’s big picture? But it’s razor-thin. Another twenty cents and the principal’s gone…
“Ha, but it’s way too close for comfort. Another twenty cents and we wipe out the principal.”
It felt good to hear it said out loud.
“Margin calls are coming. Do you even have extra cash? You dumped every last won of operating funds into this. Fail to post more margin and it’s forced liquidation—forced liquidation!”
……What?
His heart plummeted again.
Once losses crossed a certain line, the brokerage demanded additional margin.
Couldn’t pay? The position was forcibly closed.
At the absolute worst price.
No money for more margin? Forced liquidation? Then what about my money? Don’t tell me…… this isn’t a big picture—it’s no plan at all?
A scream rose to his throat.
Shouldn’t we cut and run right now?
“Shouldn’t we cut and run right now? You said we still have eight hundred billion left in the position. Let’s at least save that. It’s winter! People heat their homes, so of course gas prices will keep climbing. The whole market’s going up. At this rate it hits six dollars. Then our position collapses! Liquidate now and we can still salvage forty percent of principal!”
Only then did Gil Donggyu notice something off.
For a drunk man, that was far too coherent.
Lee Jaseung seemed to sense the same thing.
“Han Juhyeong. You’re faking drunk so you can say everything you want, aren’t you?”
A flinch.
“I-I’m drunk, hic! I r-really am!”
Lee Jaseung’s eyes cooled with pure disdain.
He turned his head toward the pillar. Half of Gil Donggyu’s massive frame was sticking out.
“Hyung, I can see you.”
……He saw me?
Gil Donggyu cleared his throat awkwardly and stepped out. Feeling the need to say something, he added,
“You two seemed to be having a serious talk.”
“Serious, my foot. Since you’re already here, hyung, say whatever you came to say.”
As if he knew perfectly well Gil Donggyu had come to complain—and was still willing to hear it out.
The perfect chance to protest openly had arrived, yet Gil Donggyu couldn’t bring himself to take the offered kindness.
That would make me exactly the same as Han Juhyeong!
In the end he forced a grin and shrugged.
“Nothing to say. I trust you. I told you that from the start, didn’t I?”
“See? Completely different from Han Juhyeong. Then why did you come?”
“Hahaha. Just dropped by on my way past to see how you were doing. Looks like everything’s fine. I’ll be going.”
“On your way out, take that drunk with you.”
“Sure. Juhyeong, let’s head back.”
Gil Donggyu hauled Han Juhyeong up. Han Juhyeong still staggered like a drunk, but every muscle locked rigid, determined not to be dragged out.
Mm. Definitely acting.
Yet the moment Gil Donggyu applied real strength, Han Juhyeong was helplessly towed along. Drag, drag, drag.
Is leaving like this really okay……
He turned away without asking a single question, yet the hesitation lingered.
Only twenty cents of margin left. We’re not actually going to get force-liquidated, right?
“Hey, Lee Jaseung. We’ve only got twenty cents of margin left. You’re sure we won’t get force-liquidated? For that to happen the price needs to start dropping soon, doesn’t it?”
Gil Donggyu’s steps slowed while he was still hauling Han Juhyeong out.
Lee Jaseung answered evenly.
“It drops. By Thursday everything will be over.”
Gil Donggyu’s ears perked up.
Thursday? That’s tomorrow.
“Thursday? That’s tomorrow. Ah, you should’ve said so earlier!”
Han Juhyeong, suddenly simple again, recovered his energy.
Inwardly relieved as well, Gil Donggyu gave Lee Jaseung’s shoulder a light clap.
“Must’ve been rough dealing with Juhyeong. I’ll drive him home.”
“What driving. Just dump him on the sidewalk. If only Han Juhyeong were even half the man you are.”
“Hahaha. See you.”
Gil Donggyu raised a hand and turned away coolly.
In that instant Lee Jaseung’s eyes caught Gil Donggyu’s back with perfect clarity.
The white shirt clung to the broad expanse of his back.
Right in the center, a perfect round patch of sweat soaked through.
……What is that?
Lee Jaseung tilted his head slightly.
Hyperhidrosis?
Seo Minjae had gone so far as to create an entire dedicated Makers desk.
The Makers Desk.
Desk head and team leader Kim Taeyoung stared up at the ceiling for a moment.
This is genuinely insane.
They had already sold 1.2 trillion won of natural gas futures. Meanwhile the price had climbed without pause and today finally punched through to $5.50.
With barely ten cents of margin left.
The order came down to sell every remaining contract as well.
“At $5.50, sell the remaining eight hundred billion in contracts. All of them.”
“Sir? Margin maintenance is already at critical levels! Additional margin calls are coming!”
“No need to calculate. Just do what you’re told.”
The traders shook their heads.
“Screw it!”
“Well, not my money.”
They executed an aggressive selling campaign.
Logic and theory be damned.
Thursday afternoon.
They succeeded in selling every last scheduled futures contract.
“Whoa…… two trillion won.”
“Even though it’s not my money the stress is unreal.”
“Hey, let’s go smoke.”
They headed for the smoking area.
The benches were already occupied by people from the neighboring desk—the one that handled other institutional clients.
The other team leader asked,
“How’d that client of yours turn out?”
“Ended up selling everything.”
“Damn, what a complete psycho.”
The neighboring team leader shook his head slowly.
The natural gas futures market was the hottest stage everyone was watching right now.
Seonkang Group and Lee Jaseung.
Their positions were locked in perfect opposition, and the entire industry was waiting to see who would be right.
At the moment it looked like Seonkang Group’s victory.
Everyone already knew Lee Jaseung was sitting on enormous losses.
Doesn’t look like any reverse is coming either.
The other team leader asked casually,
“Your client—think he’s heading for forced liquidation?”
“Looking at the trend, high chance.”
“Margin call already hit, right? How big’s the loss?”
Kim Taeyoung shrugged.
As if he had no intention of revealing that much.
Inside, though, he thought,
Come to think of it, no margin call came in.
The nightmare of futures trading: the margin call.
Losses pile up, account equity hits bottom, the bank demands more money.
Fail to pay and the position is force-closed.
$5.50 was the absolute line.
The instant it rose another ten cents—the second the price became $5.60—
the margin call would hit.
But Makers has no more cash left. Forced liquidation would follow.
That was why Kim Taeyoung simply could not understand it.
What the hell is he thinking? Prices are guaranteed to keep rising until February at least, yet he went short this early……
Right then—
“Holy shit.”
The neighboring team leader’s voice suddenly spiked. Kim Taeyoung asked, curious,
“What?”
“Ch-check the group chat. The U.S. Energy Information Administration just released a report……”
Kim Taeyoung dove in at once. Messages were flooding the chat window.
The structure of the natural gas market is simple.
Store gas in summer, draw it down from storage in winter.
But this winter had been unusually warm, so they hadn’t drawn much. Which meant—
“Storage is completely full?”
“Yeah. Even bigger problem is the producers never cut output. If this continues through January……”
Kim Taeyoung swallowed hard.
They keep producing gas, yet the storage tanks are already saturated.
So what do you do with the leftover gas?
“You have to dump it onto the market no matter what?”
Sell it into the market regardless of price.
The two men looked at each other. The situation was now crystal clear.
“The Energy Information Administration’s report just went official……”
“……Natural gas prices are going to fall.”
And they would fall after peaking exactly at $5.50.
The blade that had been pressed against their throats had just been withdrawn.
What kind of timing is this?
He looked down at his forearm. Goosebumps stood out all over it. He muttered without thinking,
“One more ten cents and the margin call would’ve hit……”
“What? You mean he never got the margin call?”
The neighboring team leader shouted in shock. Every employee clustered in the smoking area turned to stare at once.
“He dodged the margin call by ten cents?”
“Whoa. Insane…… just pure luck?”
“You think this is luck?”
“Has to be luck. If this is skill it makes even less sense.”
“Maybe he has connections inside the Energy Information Administration? He is a chaebol.”
“Hey, even a chaebol having connections in the Energy Information Administration…… do they?”
Pure chaos.
Shock spread across every face.
Lee Jaseung had completed his short position at the absolute limit of $5.50, and now that prices were about to fall he stood to reap enormous profit.
How could timing like this even exist?
Then someone spoke.
“But today’s month-end. All the futures expirations piled up today, didn’t they?”
“……!”