South Korean investors' stock trading on margin hits a record high, exacerbating stock market volatility

BlockBeats News, June 28th, South Korean Investor Margin Lending for Stock Speculation Hits Record High: Margin loans in South Korea have reached a historical record of approximately $26 billion, doubling since early 2025. However, in terms of the percentage of South Korea's free float market cap, margin loans currently only account for about 0.8%, the lowest level since the pandemic low in 2020. This is because the significant increase in the total market value of the South Korean stock market far exceeds the pace of leverage growth.

Meanwhile, in the recent market pullback, the daily forced liquidation ratio has surged to 4-5% of the total outstanding margin loans, much higher than the usual level of about 1%. This means that due to leveraged investors' inability to meet additional margin requirements, brokers are forced to liquidate 4%-5% of all margin positions in a single day. Record levels of leverage are exacerbating volatility in the South Korean market.