A single app button turned small wartime savings into a fivefold margin position, then wiped out nearly all gains within weeks.<\/p>\n
Seoul, July 20, 2026 \u2013 a story about a storm in the Korean stock market highlights the corrosive risks of using margin lending among retail investors. The 24-year-old Lee Seung-ho, a student from Seoul, watched almost 300 million won of his brokerage capital, built on 500% margin, disappear over four weeks in May. He plans to borrow again and return to the market as soon as enough funds are gathered.<\/p>\n
An intriguing fact about the young market participant: his success began with using a small button in the trading app that instantly opened a fivefold leverage, allowing him to turn 20 million won, accumulated during his military service, into substantial profits in a short period.<\/p>\n
I literally couldn\u2019t breathe.<\/p>\n
\u2013 Lee Seung-ho<\/p>\n
After this, the market saw sharp swings: as stock baskets rose and fell, retail traders faced forced liquidations that wiped out gains. Within a few weeks, the account fell below the initial investment amount, and Lee recalled the state as something that literally took his breath away.<\/p>\n
But I still stick to margin loans.<\/p>\n
\u2013 Lee Seung-ho<\/p>\n
This story illustrates the deep dependence of modern youth on leverage: even amid the rise of leverage, regulators warn that such an approach can lead to rapid losses in volatile times.<\/p>\n
Kospi, previously a leader of global gains in equities, after a brilliant six-month jump, sharply shifted toward losses, several times falling more than 10% within a short span \u2013 a signal of heightened volatility and restrictions for investors.<\/p>\n
For many young Seoul residents, leverage has a practical meaning in the context of the rising cost of living: the average price of an apartment in the city reaches about 14 years\u2019 worth of wages, so young graduates seek alternative ways to accumulate capital.<\/p>\n
\u201cSince stocks are highly volatile, it is this volatility, if it rises, that can quickly increase wealth,\u201d explains Lee. \u201cIf you add five times more leverage, wealth can grow faster than others.\u201d<\/p>\n
His long-term dream is to buy an apartment in Seoul, hoping to do so even before he marries and starts a family.<\/p>\n
Policy misstep and regulatory steps<\/p>\n
According to the Association of Investment Services, the volume of margin loans on the local market as of June 24 reached 38.63 trillion won \u2013 a record high in history. By July 15 this figure had risen to 34.37 trillion won.<\/p>\n
Total investor debt, according to the Bank of Korea, exceeded 60 trillion won by the end of May, coinciding with the stock market becoming one of the hottest and most volatile in the world.<\/p>\n
On Thursday regulators announced restrictions to curb speculative activity: a ban on new listings of margin ETFs tied to single stocks was implemented. This decision is driven by the need to cool excessive appetite for risky instruments, although regulators had approved these products two months earlier.<\/p>\n
The head of the FSS has already acknowledged that these products were approved too hastily, so this is a correction of a well-known policy misstep.<\/p>\n
\u2013 Inki Cho<\/p>\n
For retail investors who hold these products, the risk is asymmetric: leveraged borrowing speeds up losses during declines faster than it multiplies wealth during rallies in such a volatile period.<\/p>\n
\u2013 Inki Cho<\/p>\n
I understand these risks, but I believe leveraging is the best way forward.<\/p>\n
\u2013 Lee Seung-ho<\/p>\n
For people who still hold these products, the risks remain high, as leverage can quickly turn small bets into a large loss in a volatile market.<\/p>\n
In the end, Lee remains focused on further participation in the market, but now understands the potential consequences. His story underscores that the leverage system, torn between the pursuit of home ownership and real financial risks, requires careful regulation and a prudent approach by retail investors to risky instruments. At the same time, regulators continue to work on reducing excessive activity and building more stable foundations for the financial market for young people.<\/p>\n","protected":false},"excerpt":{"rendered":"A single app button turned small wartime savings into a fivefold margin position, then wiped out nearly all…\n","protected":false},"author":2,"featured_media":92041,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[171,28977,48375,24617,3536,154,989,16728],"class_list":["post-92040","post","type-post","status-publish","format-standard","has-post-thumbnail","category-korea","tag-korean","tag-leveraged-etfs","tag-leveraged-etfs-margin-trading-retail-investors-south-korea-stock-market-market-volatility","tag-margin-trading","tag-market-volatility","tag-news","tag-retail-investors","tag-south-korea-stock-market"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/92040","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=92040"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/92040\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/92041"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=92040"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=92040"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=92040"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}