George Soros / 1997 / Macro
The pressure behind the peg.
George Soros and the workbook’s Asian currency-crisis case.
Before the outcome was obvious.
This case returns to the tension between a fixed exchange rate and changing capital flows. The workbook points to external deficits and the withdrawal of short-term money. A peg can make borrowing feel safer by removing visible currency movement, while allowing vulnerabilities to grow underneath it. The position is presented as a short baht trade; the estimated profit is not an audited attribution of the wider Asian crisis to one investor.
What could have gone wrong
Intervention, capital controls and changing access to funding can make a currency short difficult to maintain or close.
Stability in the quoted price does not establish stability in the financing behind it.
Put the thesis to the test.
Change the assumptions and watch the arithmetic update. These are simplified scenarios; they do not recreate the instrument’s pricing or the path of the trade.
How this model works
Profit ratio = profit ÷ stated position. Exposure ratio = stated position ÷ fund assets. Neither is a measure of maximum loss or a net investor return.
The workbook’s simple annualisation is profit ratio × 365 ÷ duration = 91.3%. It is linear, not compounded, and is not a repeatable annual return. Fees, financing, collateral, premium carry and changing exposures are not modelled.
What these figures mean.
Source: Legendary Trades Models, Master Comparison!A13:L13; Trade P&L Models, case 10. The following are original workbook inputs, preserved for transparency. They are estimates, not independently audited results.
- Workbook position
- $5bn
- Workbook “gross profit”
- $750m
- Workbook duration
- 60 days
- Workbook fund assets
- $20bn
- Workbook fund return
- 37%
- Workbook position ROI
- 15%
The fund-return field is a separate source claim, not a calculated result of this trade. Its reporting period and gross/net basis are not independently established here. Model ratios are recalculated from inputs rather than copied from rounded source ROI values.