Chapter 12
Chapter 12
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Translator: MadScientist
Chapter: 12
Chapter Title: Earning Pocket Money (1)
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After starting elementary school, I spent money like water, just having fun.
Well.
To be honest, I was starting to get a real taste for spending it.
To prepare for the film industry that would boom after democratization, I got my foot in the door early at a movie studio, and I threw cash at promising scholars too.
Even the snobbiest professors who wouldn't give a kid the time of day bowed their heads when I offered research funding.
A few professors I'd taken classes from in my past life were still grad students, and it felt weird seeing them. I almost slipped and used formal speech.
Honestly, I wanted to splash money around Donggyo-dong or Saangdo-dong for political funds, but that was too risky for me right now. The new military regime was still going strong, after all.
Anyway, the result was...
"...I'm out of money now."
That's right.
I was broke.
Meaning... about 100 million won in cash?
◇◇◇◆◇◇◇ Well, I wasn't totally broke. Most of my assets were in stocks anyway.
"...Then isn't that fine? The Chairman will just give you more pocket money anyway."
Lee Si-hyeon stood there blankly, spouting nonsense. She still didn't have a good sense of money.
100 million won in cash was pocket change, really.
"Sigh. Should I go begging to Grandpa? I've got to stand on my own two feet. And he'd be disappointed if I did."
And most importantly...
My myth would crumble.
"I told you, making money is easy. Super easy. The story I'm building is mine. Like Grandpa's founding legend, a myth that drives people wild."
It's not something you can buy with money, and it becomes the trajectory of my life, turning straight into my power.
Just like how even a clueless country bumpkin thinks Yoo Seong-pil must be some mega-rich tycoon at the mere mention of his name, someday when people hear Yoo Ha-yeon, they should think of the greatest success story of the 21st century.
"For someone building all that, you're a bit short on cash right now."
Lee Si-hyeon grumbled softly as she brought out my snack. Sweet chocolate cake and warm milk. Not some store-bought stuff, but made fresh by a top pastry chef.
"Mmm. Delicious. Sweet and perfect."
Grateful for this miraculous body that never gained weight no matter how much I ate, I savored the sugary delight. Was this the taste of power...?
"Th-that cake right there, and pretty much everything else, you buy with your own money, don't you, Miss? Honestly, no one would complain if you used the Chairman's money at your age..."
I flashed a grin at that.
"Nope. Everything has to come out of my pocket. That's how you seize control. And after I make a bit this time, I'm going independent. Time to buy my own place."
Grandpa's house was great, but now I wanted my own.
"Your own place? Why leave this perfect spot...? No, wait. You're really going to make money now? For real?"
Lee Si-hyeon's eyes sparkled. I'd talked a big game about easy money while just spending it, but I'd rarely shown her the earning part.
Truth be told, I'd done it on purpose half the time. It made things more dramatic. That's why I'd been fostering this casual vibe lately.
This was way more fun.
And... now the real start begins. If they made a 300-page biography on Yoo Ha-yeon, this would be around page 30. Right about there.
"Yeah. It's August now, perfect timing to move. The exchange rates are about to go crazy soon."
Plaza Accord next month.
The yen-dollar rate was about to flip completely.
◇◇◇◆◇◇◇ "The exchange rates... are changing?"
Lee Si-hyeon looked puzzled after my explanation.
"I kinda get it, but how exactly do we make money off it?"
I grinned and tossed the question back.
"You think about it. Time you learned to figure things out yourself, right?"
"Hearing that from an eight-year-old feels fresh... Hmm. Buy dollars and convert to yen ahead of time? If what you said is right, that's at least double the profit."
That was correct enough. From 250 yen per dollar down to 120, the yen doubles in value. Straight currency gains would net double.
"But that's only double. Can't we go crazier? You know opportunities like this don't come often."
Rates crashing like this were rare. And since bureaucrats set it arbitrarily, the market couldn't touch it!
I knew the exact, precise moment it would flip. No butterfly effect.
"Hmm... I don't know much, but when rates change, some companies tank and others boom, right? Come to think of it, that's the whole point of the change—checking corporations and such. So investing in companies would be good."
I nodded.
"Hmm. About a 70?"
Close enough.
"What's a perfect score?"
"150."
"Kinda vague."
Lee Si-hyeon lit up briefly, then looked half-pleased, half-confused. Like she'd gotten it right but felt teased anyway.
She wasn't wrong—I was teasing.
"Ever hear of futures? Not 'gift,' futures."
"...Not really. Future as in the future... right?"
"What about options?"
"Oh, that rings a bell..."
Something about the word jogged her memory, and she racked her brain. But I cut her off before long.
"Nah, you don't know. Hardly anyone on the trading floor does, at this point."
"...Then why ask?"
"To see your reaction."
I chuckled mischievously and launched into the explanation.
"There are these things called derivatives. Created by some cool adults who want to price and trade everything in the world."
"Whoever they are, if you rate them that high, they sound like total villains from a normal person's view."
"They probably started with good intentions. Like the guy who invented the machine gun."
The '80s were when derivatives really took off. Tough market for regular investors now, but my connections made it possible.
I hadn't just been playing around.
"Derivatives are tied to an underlying asset that sets their price. Main ones are futures, options, swaps."
Si-hyeon's eyes were glazing over already.
"...What's the underlying asset?"
"Pretty much anything that can be an asset. Usually stocks, but here it's exchange rates, and we'll do options. Forget futures and swaps for now."
Lee Si-hyeon, who'd been hitting the books lately, nodded eagerly. If she played it right, she could make money too.
"Options are simple: buying and selling rights."
"Rights?"
"Yeah. Rights to buy or sell the underlying—foreign currency from now on—at a set price on a set date. That's a forex option."
She closed her eyes, thought, then nodded. As expected from an elite uni student, sharp mind.
"So... it's trading ahead of time. You don't know the future exactly, but you bet on a price. High volatility, obviously... nail it and you rake it in."
I smiled and confirmed.
"Right. Slight differences, but I haven't explained those yet, so near perfect."
"...Wait. Isn't this basically futures? Pre-trading, forward goods. The words are almost the same."
Hmm, I picked a good secretary. Or did the Secretary General?
With such a quick, responsive audience, I got even more excited and clapped.
"Exactly. Options are rights. Futures are pre-trades, like you said—contracts, so you have to exercise at maturity. Options? You can skip if you want. Just forfeit the right."
Say I buy an option to exchange 1 dollar for 200 yen.
At maturity, it's 100 yen per dollar. I win.
But if I buy for 50 yen per dollar? Loss. Why take 50 when the market gives 100?
So you let options lapse.
"Hold on. Doesn't that mean the seller always loses? They lose if it goes against, and if it goes for them, the buyer walks... Oh."
She got it mid-sentence and bowed her head.
"Options have a price."
Bingo. That's the premium.
"Derivatives were made to hedge risk originally. Trade the risk itself to protect your underlying. So options cost money."
"Sounds like insurance."
"Yep. Insurance is basically an option contract."
If you don't want the risk, pay someone else to take it. They get paid to share the potential downside.
In other words...
Options—no, derivatives—are risk incarnate.
I set down my half-full milk glass with a clink.
The milk sloshed, splashing droplets inside. I pointed at the rippling surface.
"This is the underlying asset..."
Then I tilted it, pouring milk into a nearby saucer. The smaller dish made the surface thrash wildly, spraying more drops.
"This is the derivative."
The underlying is like gauging the depth of a steady river. Derivatives? Betting on wave height in a storm-tossed sea.
More dangerous, less predictable, riskier...
But way bigger rewards.
And I know the future.