Margin Debt Tops 36 Trillion Won as Short Selling Nears Record in Korea

As the KOSPI has seen frequent sharp moves, bets on both rising and falling share prices are expanding. According to the Korea Financial Investment Association on May 15, the margin trading loan balance reached 36.4698 trillion won the previous day, a record high. That was up 9.1833 trillion won, or 33.66%, from 27.2865 trillion won at the end of last year. The rise is viewed as linked to stronger FOMO after the KOSPI gained more than 70% this year. Short-selling demand has also increased as caution over a correction deepens. Korea Exchange data showed the KOSPI market’s net short-selling balance stood at 20.5811 trillion won as of May 12, up 67.18% this year and close to a record. Market watchers are concerned forced sales from collateral shortfalls and panic selling could increase volatility. Source: hankyung.com.