Monitors at Hana Bank’s dealing room in Jung-gu, Seoul, display the Kospi, Kosdaq and won-dollar exchange rate on June 23, when the Kospi fell more than 8%, triggering a “circuit breaker” that halted trading for 20 minutes. Photo by Cho Tae-hyung 2026.06.23
The KOSPI rebounded the day after “Black Tuesday” (Oct. 23), when the index plunged, but the value of individual investors’ stocks forcibly liquidated through margin calls soared to over 100 billion won, data showed. Given that margin calls are executed at the market open, individual investors appear to have been unable to fully capture the profit opportunity from the post-plunge rebound.
According to the Korea Financial Investment Association on Monday, outstanding brokerage receivables classified as “debt-fueled investment” stood at 1.3768 trillion won as of Oct. 24. These transactions involve funds individuals borrowed from brokerages for two days, down about 100 billion won from the previous day (1.4792 trillion won).
However, on the same day (Oct. 24), the volume of forced liquidations resulting from unpaid borrowed funds reached 110.7 billion won. That is well over double the 42.4 billion won forcibly liquidated in the previous session. It was the first time forced liquidations exceeded 100 billion won in nine days, since Oct. 15 (100.8 billion won).
On Oct. 23, Samsung Electronics (005930.KS) and SK hynix (000660.KS), the two largest companies by market capitalization on the KOSPI, plunged 12.31% and 12.47% respectively, driving the index’s decline to 9.99%. A day later, on Oct. 24, the index rebounded 3.26% immediately, yet more than 100 billion won worth of stocks held by individuals were forcibly sold off. Over the two days of Oct. 23 and 24, forced liquidations totaled 153.1 billion won.
The ratio of forced liquidations to receivables also rose from 3.3% on Oct. 23 to 7.5% on Oct. 24. That was the highest level since Oct. 9 (10.5%). In these transactions, investors borrow money from brokerages to buy stocks and must repay within two trading days; if they fail to do so, the stocks are forcibly sold on the third trading day.
The debt-fueled investment frenzy is also continuing. As of Oct. 24, the balance of margin loan transactions stood at 38.6328 trillion won, up 539.2 billion won from the previous session, surpassing the Oct. 19 level (38.4786 trillion won) to set another record high. The margin loan balance represents amounts investors borrowed from brokerages for stock investment and have not yet repaid. The loan period is usually a week or longer.
Amid this situation, financial authorities are concerned about overheated investment fervor, including the recent concentration of individual investors in single-stock leveraged ETFs. Lee Chan-jin, governor of the Financial Supervisory Service, said at a press briefing on Oct. 22, “Along with active trading, leveraged investment such as margin loan balances is expanding considerably, but because market capitalization has risen so sharply, the perceived scale is diminished.” He added, “We are monitoring carefully and taking this seriously so as not to be buried in a statistical illusion.” He continued, “Surprisingly many leveraged ETF investors are middle-class or ordinary people, so sharp volatility could deal a major shock to households, and we are considering separate stabilization measures.”
Meanwhile, according to the Korea Exchange on Monday, the KOSPI closed at 8,930.30, up 459.28 points (5.42%) from the previous trading day, putting it within reach of reclaiming the 9,000 mark.