▲ The KOSPI and other indices are displayed at the Hana Bank dealing room in Jung-gu, Seoul, on the 8th. On that day, the KOSPI closed at 7,484.41, down 676.18 points (8.29%), and the KOSDAQ closed at 911.39, down 91.05 points (9.08%).
It has been reported that 300 billion won worth of stocks held by individual investors were forcibly liquidated through margin calls over the past two trading days as the KOSPI experienced a sharp decline.
According to the Korea Financial Investment Association on the 9th, the outstanding balance of short-term margin trading—classified as "debt-financed investment"—stood at 1.6245 trillion won as of the 8th.
While this is a decrease of 64 billion won from the previous trading day on the 5th (1.6885 trillion won), it remains approximately 300 billion won higher than the level seen on the 2nd (1.3277 trillion won).
In these transactions, investors borrow money from brokerage firms to purchase stocks and must repay the funds within two trading days. If they fail to do so, the stocks are forcibly sold (margin call) on the third trading day.
Consequently, the amount of forced liquidation on the 8th was recorded at 139.1 billion won.
This marks the third-largest scale of such liquidations this year.
In particular, following the forced sale of 166.1 billion won on the 5th, the amount exceeded 100 billion won for two consecutive days, resulting in over 300 billion won being forcibly liquidated over the two-day period.
The KOSPI plunged by 5.54% and 8.29% on the 5th and 8th, respectively, falling below the 8,000-point mark.
Although margin calls reached 145.8 billion won on the 20th of last month, this is the first time this year that the figure has exceeded 100 billion won for two consecutive days.
The ratio of forced liquidations to outstanding margin debt also reached 8.2% on the 8th, maintaining a high level following the previous trading day (9.1%).
The previous trading day saw the highest level since October 24, 2023 (53.2%).
The balance of credit loans for stock trading stood at 37.7091 trillion won on the 8th, a slight decrease from the 5th (37.8383 trillion won).
However, this balance has remained at a high level in the high 37 trillion won range for five consecutive trading days since surpassing 38 trillion won for the first time on the 29th of last month.
The credit loan balance represents the amount of money investors have borrowed from brokerage firms for stock investments that has not yet been repaid.
This indicates that individual investors have a significant amount of debt-financed investments.
(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.