As KOSPI Swings Wildly, Short-Term Trading Surges... Turnover Jumps 136% in a Month [U.S.–Iran war]

Stock market volatility has spiked sharply due to geopolitical risks in the Middle East, leading to a surge in short-term trading. As the market repeatedly plunges by double digits in a single day and then rebounds the next—what traders call a "gyro drop" pattern—short-term profit-taking trades are pushing up market turnover.
According to the Korea Exchange (KRX) on the 10th, the average daily turnover of stocks listed on the Korea Composite Stock Price Index (KOSPI) has reached 2.03% so far this month. This is about 136% higher than the January average of 0.86%, and roughly 23% above the February average of 1.65%.
Turnover represents the proportion of all listed shares that actually change hands in a single trading day. In the KOSPI market this month, about 1.3 billion shares have been traded per day on average, meaning roughly 2% of all listed shares are being bought and sold every session. Analysts say that as more investors focus on swing trades that exploit short-term price moves rather than the index’s overall direction, the pace of trading in the market has accelerated rapidly.
In fact, the market has recently shown extreme volatility. On the 4th, the KOSPI plunged 12.06% in a single day, only to soar 9.63% on the 5th. The index thus swung by more than 20% over just two sessions. During the same period, turnover also jumped to this year’s highest levels, reaching 2.58% on the 4th and 2.60% on the 5th. Trading value exceeded 60 trillion won, indicating a short-term concentration of large-scale transactions.
An increase in cash waiting on the sidelines has also played a role. Investor Deposits stood at about 118 trillion won on the 27th of last month, then surged to 129.8187 trillion won on the 3rd, right after the Middle East risk erupted. They climbed further to 132.0682 trillion won the following day, setting an all-time high. On the 5th, they remained elevated at 130.8873 trillion won, holding above the 130 trillion won level. Outstanding margin loans are also rising quickly. The margin loan balance surpassed 30 trillion won at the end of January and continued to grow, then spiked in March as volatility increased, hitting 33.1977 trillion won on the 4th and 33.6945 trillion won on the 5th, both record highs. Market participants view the rise in turnover as driven by increased inflows into equities and greater use of leveraged trading.
Lee Sang-heon, an analyst at iM Securities, explained, "Recently, the market has seen sharp volatility, with steep declines one day followed by big gains the next. As not only existing investors but also newly injected funds actively participate in trading, overall activity has become much more intense."
Brokerage analysts also warn that as market volatility widens, there is a risk that short-term trading behavior among investors could spread further through a kind of learning effect.
koreanbae@fnnews.com Bae Han-geul Reporter