South Korean investors' borrowing for stock trading hits record high, record leverage adds to volatility in Korean stocks.

robot
Abstract generation in progress
Mars Finance News, on June 28, the amount of Korean investors borrowing to buy stocks hit an all-time high: Korea's margin loans have reached a record of about $26 billion, doubling since the beginning of 2025. However, as a percentage of Korea's free float market cap, 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 cap of the Korean stock market has far outpaced the growth of leverage. At the same time, during the recent market correction, the daily forced liquidation ratio surged to 4-5% of total outstanding margin loans, far higher than the normal level of about 1%. This means that because borrowing investors fail to meet margin calls, brokers are forced to liquidate 4%-5% of all margin positions in a single day. Record leverage is amplifying volatility in the Korean market.
View Original
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
  • Reward
  • Comment
  • Repost
  • Share
Comment
Add a comment
Add a comment
No comments
  • Pinned