"Accounts Were Forced Into Liquidation" Retail Investors Cry Out... Stock Market Rout Triggers 60 Billion Won in Forced Selling in a Single Day

[Financial News] As the domestic stock market continues its sharp decline day after day, margin balances tied to short-term leveraged investing, known as "debt investing," are rising again. The scale of forced selling, in which shares held by individual investors are liquidated because they failed to repay margin debt on time amid falling stock prices, surged more than fourfold in just one day.
According to the Korea Financial Investment Association on the 30th, margin balances stood at 1.1999 trillion won as of the 29th. That was slightly lower than the previous session's 1.2237 trillion won, but the overall trend has turned upward again.
Margin trading, in which investors borrow funds from securities firms for two days to buy stocks, had fallen below 1 trillion won on the 23rd, at 945.4 billion won, for the first time in three months. But it climbed back above that level the very next day, reaching 1.0321 trillion won on the 24th, and has continued to rise since then.
Forced selling of unpaid margin debt, known as "opposite trading," also jumped sharply. On the 29th, the amount of forced selling reached 61.1 billion won, 4.4 times the previous day's 13.8 billion won. The ratio of forced selling to margin balances also rose from 1.3% on the 28th to 5.0% on the 29th, nearly quadrupling.
This is being attributed to the recent record-breaking market slump, with the KOSPI (Korea Composite Stock Price Index) plunging 10.84% in a single day on the 28th and then falling another 5.98% on the 29th. Individual investors were unable to withstand the collateral shortfalls and losses from the decline, leaving them exposed to forced selling.
Meanwhile, outstanding credit loans, another indicator of debt investing, stood at 32.995 trillion won as of the 29th, down by about 200 billion won from the previous session. Even so, the figure continues to fluctuate around the 33 trillion won mark.
By contrast, investor deposits, which represent cash waiting on the sidelines for stock market opportunities, rose by 2.3931 trillion won from the previous day to 109.5925 trillion won as of the 29th, showing an inflow of idle funds despite the market's volatility.

[email protected] Moon Young-jin Reporter