The amount of money South Korean investors borrow for stock trading hits an all-time high, and record leverage amplifies volatility in Korean stocks

BlockBeats News, June 28 – South Korean investors' borrowing for stock trading has hit an all-time high: margin loans in South Korea have reached a record of approximately $26 billion, doubling since the beginning of 2025. However, as a percentage of South Korea's free-float market capitalization, margin loans currently account for only about 0.8%, the lowest level since the pandemic low in 2020. This is because the sharp rise in the total market capitalization of the South Korean stock market has far exceeded the growth rate of leverage.

Meanwhile, during the recent market correction, the daily forced liquidation ratio has surged to 4-5% of total outstanding margin loans, far higher than the normal level of about 1%. This means that because borrowing investors cannot meet margin calls, brokers are forced to liquidate 4%-5% of all margin positions within a single day. Record leverage is amplifying volatility in the South Korean market.