"Debt investing is this scary" ... about 150 billion won forcibly liquidated in a single day after the market plunged following an '8,000-point KOSPI'

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[Financial News] After KOSPI broke through the 8,000-point mark and the market continued to fall, stocks forcibly sold through margin trading in the previous session came to nearly 150 billion won.
According to the Korea Financial Investment Association (KOFIA) on the 21st, the amount of forced selling tied to the short-term 'margin trading' that individual investors borrow from a securities company for two days stood at 145.8 billion won as of the previous day, the 20th. Daily forced selling topped 100 billion won for the first time in 31 months, since Oct. 24, 2023, when it reached 548.7 billion won.
The amounts forcibly liquidated on the 19th and 18th also reached 67.6 billion won and 91.7 billion won, respectively. That means about 300 billion won was sold through forced liquidation over three days.
What stands out is that the margin positions liquidated on the 20th were created on the 15th. The 15th was the day the correction began, after KOSPI plunged immediately after touching the 8,000-point level. Investors who had bought stocks with borrowed money from a securities company were then forced to sell when their margin deposits became insufficient during the subsequent selloff.
Outstanding margin debt on the 20th came to 1.6421 trillion won, down 280 billion won from the previous day. However, the ratio of forced selling to margin debt surged to 7.6%, surpassing 6.5% on March 5 and setting a new high for the year. The ratio also stood at 6% and 4.6% on the 18th and 19th, respectively, showing a sharp rise during the recent downturn.
Meanwhile, margin loans, or investments made by borrowing funds from a securities company for more than 30 days, rose by 381 billion won from the previous session to 36.237 trillion won as of the previous day. As the downturn continued, investor deposits, which are waiting funds for the stock market, also fell again to 12.56439 trillion won. That was down 11.7735 trillion won from May 12, when the figure had approached 140 trillion won at 13.74174 trillion won.
Meanwhile, KOSPI showed extreme volatility immediately after reaching the '8,000-point KOSPI' milestone and at one point came close to falling below the 7,000-point level. After dropping about 10% through the 20th, KOSPI rebounded sharply on the 21st on the back of a series of positive domestic and overseas developments, ending the session at 7,815.59.
bng@fnnews.com Kim Hee-sun Reporter