South Korea's Single-Stock Leverage Trading Collapses 84% in 4 Days; Kosdaq Rebounds 24% as Money Shifts

According to Chosun Ilbo, South Korea's single-stock leverage product trading volumes plummeted 84% in four trading days following new regulations that took effect on July 31. Average daily trading for 16 leverage and inverse products fell from 10.73 trillion won in the five days prior to regulation to 1.70 trillion won post-implementation, with volume dropping below 1 trillion won by August 5.

The shift redirected capital to the broader Kosdaq index, which saw trading volume increase 13.9% over the same period to 5.79 trillion won, and rallied 24% in four trading days ending August 5. The new regulations raised minimum deposit requirements from 10 million won to 30 million won and recognized only cash deposits, excluding stocks, ETFs, and bonds.