1, preliminary preparation:

(1) Research and Plan: Go deep into Thailand to study the real situation of economic development in this region. According to the first-hand information and data, make a detailed operation plan;

(2) Preparation of funds: After deciding to attack the Thai baht, we will borrow money from local banks, raise funds from offshore financial markets, sell local assets, borrow shares from local stock custodians and sell short in exchange for Thai baht.

2. Start sniper:

(1) violently selling Thai baht in the spot market for US dollars;

(2) Buy a large number of forward contracts from local banks and short the forward Thai baht, that is, pay the Thai baht to the bank in the forward and ask for US dollars;

(3) short the stock market.

3. Sniper effect

(1) Hedge funds violently sold Thai baht into US dollars in the spot market, which caused the market to expect the devaluation of the currency, thus triggering subsequent selling and causing the devaluation of the Thai baht;

(2) In order to avoid the risk of forward foreign exchange transactions, banks try to stabilize the currency position, that is, sell Thai baht in the spot market for US dollars, thus accelerating the devaluation of Thai baht;

(3) In order to maintain the stability of the exchange rate, the Thai monetary authorities should absorb the sold local currency and raise the interest rate of short-term loans in local currency to increase the speculative cost of speculators. Both of these practices will raise the interest rate of the local currency. The measures taken by Thailand to protect non-speculative credit demand have caused a huge difference between domestic interest rates and offshore interest rates, thus creating arbitrage opportunities;

The rise in interest rates led to a sharp decline in the stock market.

4. Profit:

(1) Hedge long-term forward contracts with the same maturity date and the same amount with short-term forward contracts, or exchange US dollars for Thai baht in the spot market for due delivery;

(2) Converting a fixed interest rate into a floating interest rate by using an interest rate swap contract;

(3) the stock price goes down, and the stock market closes its position to make a profit;

(4) Hedge funds will convert the funds obtained in the stock market into US dollars, further increasing the pressure of Thai baht depreciation;

(5) After the devaluation of the Thai baht, buy back the Thai baht in dollars at a low price to repay the Thai baht loan and interest.

Note: using foreign exchange futures and options trading to attack is similar to forward foreign exchange trading.