The margin loan balance is indeed at a record high of around 38 trillion won, a figure that first crossed this threshold on May 29th and reached 38.63 trillion won by the end of June. The increase from approximately 27.3 trillion won at the beginning of the year is close to 39 percent; while the claim of doubling might be an exaggeration, the growth rate is truly striking. The average daily balance for the second quarter reached 35.94 trillion won, representing a 15.9 percent increase compared to the first quarter average. KOSPI accounts for approximately 76 percent of this balance, while KOSDAQ's share remains relatively small. However, the margin dependency on KOSDAQ relative to its market capitalization is more than four times that of KOSPI, a significant detail explaining why KOSDAQ has experienced such sharp declines.

The margin loan balance is indeed at a record high of around 38 trillion won, a figure that first crossed this threshold on May 29th and reached 38.63 trillion won by the end of June. The increase from approximately 27.3 trillion won at the beginning of the year is close to 39 percent; while the claim of doubling might be an exaggeration, the growth rate is truly striking. The average daily balance for the second quarter reached 35.94 trillion won, representing a 15.9 percent increase compared to the first quarter average. KOSPI accounts for approximately 76 percent of this balance, while KOSDAQ's share remains relatively small. However, the margin dependency on KOSDAQ relative to its market capitalization is more than four times that of KOSPI, a significant detail explaining why KOSDAQ has experienced such sharp declines.

On the compulsory liquidation side, the figures show a truly alarming acceleration. In June, on a single day, June 23rd, the day KOSPI experienced its sharpest decline in history, compulsory liquidation reached 42.4 billion won. The situation worsened in July, with total compulsory liquidation reaching 425.8 billion won between July 1st and 10th, including 142.2 billion won in a single day on July 9th. These figures only cover one category, outstanding brokerage transactions; there is a separate compulsory liquidation channel stemming from margin credits. The compulsory liquidation ratio, the ratio of liquidated transactions to pending transactions, jumped from around 1% in January to 5.1% in June and to 10.2% on July 9th, a level brokers already consider a warning sign above 5%.

The compulsory liquidation ratio, or the ratio of liquidated transactions to pending transactions, jumped from around 1% in January to 5.1% in June and to 10.2% on July 9th. I have not been able to independently verify the figures you mentioned regarding 1.2 million accounts triggered by margin calls and 320-360 thousand accounts subject to forced liquidation. Therefore, these specific numbers should be read with caution; they may be true, but I have not encountered these exact figures in the sources I have access to. The Central Bank's own warning is clear: in the event of a significant correction in stock prices due to the increase in debt-backed investments and leveraged ETFs, individual investor losses could increase, and forced liquidations could amplify price volatility.

This situation is directly linked to the concentration risk in leveraged single-stock ETFs that we discussed earlier; together, the two explain why the Korean market has experienced such sharp and recurring declines. For those following the Korean market and related assets through Gate, the key point to watch is whether the mandatory liquidation rate will remain above 10%, as this level already exceeds brokers' own risk control thresholds, increasing the likelihood of further margin rules being tightened in the coming days, which could be a source of additional selling pressure in the short term.

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