Soros borrowed Thai baht from the American government (this speculation is often carried out by borrowing money), and then sold a lot of Thai baht, so many foreign-funded enterprises in Thailand were affected to sell (Thailand's economy is export-oriented and there are many foreign investors), and more people sold Thai baht. According to the principle of supply and demand, the Thai baht depreciated sharply. Then, Soros took advantage of the devaluation of the Thai baht, bought a lot of Thai baht, and paid back the money of the US government, making a big profit from it.

Specifically:

1。 Speculation in the spot market by using spot foreign exchange transactions is to obtain enough weak currency (Thai baht) from local bank loans or offshore market financing, and violently sell foreign currency (US dollar or Japanese yen) in the spot market, which causes the market to expect the devaluation of the currency, thus triggering subsequent selling, and then buy back the currency from the spot foreign exchange market at a low price after the devaluation to repay the loan.

2。 Speculation in the forward foreign exchange market by using forward foreign exchange transactions means buying a large number of forward contracts from local banks and shorting the weak forward currency (Thai baht). In order to avoid risks, banks will try their best to stabilize their currency positions, that is, selling money in the spot market for foreign currency will also cause the above effects. After currency devaluation, speculators (Soros) can hedge with forward contracts with the same maturity date and the same amount, or exchange foreign currency for the currency due for delivery in the spot market.

3。 The use of foreign exchange futures and options trading for shocks is similar to that of forward foreign exchange trading, and no details are given.

4。 Use the intervention of the monetary authorities to speculate. Specifically, when the monetary authorities (Thailand) encounter a large number of selling local currency, in order to maintain the exchange rate stability (Thai baht is pegged to the US dollar), they will intervene in the market to absorb the sold local currency, and at the same time raise the short-term loan interest rate in local currency, increasing the speculative cost of speculators. Both of these practices will raise the interest rate of the local currency. Speculators expect interest rates to rise sharply, so they can use interest rate swap contracts to change fixed interest rates into floating interest rates. Since rising interest rates will lead to a decline in the local stock market, speculators can also make profits by shorting local stocks.

Using the above methods at the same time, Soros naturally earned a lot of money.