How Soros made Money

Key words: Soros, Bank of England, Thaid, Hongkong, pound,

To make his profit happen, he need to drive down the value of the targeted currency:
Borrow targeted currency (from the targeted country maybe), sell it in exchange market to drive its value down.

then the profit making ways are

  1. when repurchase the currency to payback to the borrower, cost is lower. (1992, Soros borrowed pound to buy mark. After pound dropped, he used less mark to repurchase pound to payback to the borrower, then he made extra mark in hands.)
  2. create short position on pound (future: enter contract to sell pound; option: buy the right to sell pound or sell the right to buy pound)
  3. long the stock market in England case, because currency value drop, stock market rises (share become cheaper to purchase for foreign investor, foreign capital come in).

简单的说就是:抛售泰珠使其贬值,同时购买泰珠的看跌期权,泰珠跌的越多他赚的越多, cited from baidu know-how


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