A euphoric run in South Korean equities has given way to a violent reversal, with repeated circuit breakers, margin calls and forced liquidations hitting retail traders across the market.
On June 16, a viral internet meme about a "golden age" for humanity spread widely online. Three days later, the KOSPI hit an intraday record of 9,385, appearing to validate the market’s exuberant mood. What arrived before any move to 10,000, however, was a steep selloff.
Over the past month, South Korea’s entire market triggered four marketwide trading halts, all of them downside circuit breakers. The KOSPI market also triggered its sidecar mechanism 38 times, while the KOSDAQ market triggered 22 sidecars, exceeding the full-year record set during the 2008 financial crisis. The KOSPI’s maximum drawdown from its record high reached 32%.
Forced liquidations accelerated by mid-July
As of mid-July, forced liquidations for the month had reached KRW 344.2 billion. Across the market, more than 1.2 million leveraged retail accounts had breached margin-call lines. Of those, roughly 320,000 to 360,000 accounts were fully liquidated by brokerages. The report said that was equal to about one in every 30 Korean adults, or roughly 3.4%, facing blowup risk.
Retail margin deposits also dropped sharply. Balances were down by nearly KRW 30 trillion from the end of June, falling to KRW 107.1 trillion, the lowest level since June 2020. Behind each fresh trading halt, the report says, were retail investors cutting positions, taking losses and getting wiped out on leverage.
SK Hynix losses turned into a viral "floor" meme
On July 13, Korean entertainer Seo Dong-joo said on the YouTube channel Money Trap that she had bought SK Hynix near the top at KRW 2.59 million. After the stock fell back to KRW 1.84 million, she described herself as a Korean ant investor "stuck on the 259th floor."
Speaking about the market outlook, Seo said: "I think I should wait a little longer. Even though that’s what I say out loud, I’m actually very anxious inside. Sometimes I look at the falling numbers on my phone screen and end up shouting without realizing it."
Her case was not unusual. A video creator known as "Raral" posted a meme saying "there are people on the 280th floor too," joking about being trapped after buying SK Hynix at KRW 2.8 million. Her account lost 44%, or KRW 2.294 million, last month and kept sliding this month. Korean comedian Miha also said she had once lost KRW 100 million trading stocks.
As prices kept falling, the stock-price "floor" meme spread across Instagram and short-video platforms, becoming a form of self-mockery among younger Korean investors.
A 24-year-old veteran went from KRW 20 million to KRW 300 million, then to zero
The report highlights the case of Lee Seung-ho, a 24-year-old Korean military veteran who saved KRW 20 million during his service and then made an all-in, leveraged bet on a single stock. At one point, his account value surged to KRW 300 million.
"We live in an era when buying property is out of reach, so stock investing became my only hope of changing my life," Lee said. He said the price of an ordinary apartment in Seoul equals 14 years of income for a young person who spends nothing at all. In that setting, he saw leveraged investing as the only path to narrow the wealth gap.
When the market turned, the collapse in his concentrated position erased not only KRW 280 million in paper gains, but also his original principal. He had also used credit loans and leveraged products to expand the position, which pushed the loss much deeper.
The story was not unique. According to South Korean financial industry data cited in the report, household loan balances at five major commercial banks — KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank and NH NongHyup Bank — totaled KRW 647.58 trillion at the end of June, excluding policy loans. That was up KRW 3.70 trillion from the end of last year. The increase already amounted to 85.3% of the annual lending cap, leaving only about KRW 639.5 billion in room for the rest of the year. The report described the market for stock investing with borrowed money as entering an "over-lending period."
Paid stock tips ended in a stabbing case
On July 13, South Korean stocks fell again and triggered another marketwide circuit breaker. On the same day in Busan, a man in his 20s stabbed a man in his 40s and fled. As details emerged, the case was linked to heavy losses suffered by a follower of a stock-picking influencer.
The victim was identified in the report as a YouTube stock-channel host, possibly WinnersTV. He had allegedly used paid livestreams to aggressively encourage followers to go all-in. The report says he used lines such as, "Even if you have to sell your underwear, buy this stock," and "You need to learn how to use financing bonds flexibly," while urging followers to sell cars and gold and place full-position bets on leveraged semiconductor products.
Many followers were later forced out when the market plunged. According to Busan police, the attacker was a subscriber to the channel who had suffered major losses after acting on the host’s recommendations and fallen into financial distress. The blogger was later referred to prosecutors on suspicion of acting as an unlicensed investment adviser.
Foreign investors bought for four straight sessions, but losses spread
Data from the Korea Exchange showed that foreign investors were net buyers of South Korean stocks for four consecutive trading sessions from July 20 to July 23, with cumulative net purchases of KRW 5.574 trillion, or about $3.8 billion. That marked the first four-day streak of net inflows since April.
On July 22 alone, foreign investors were net buyers of KRW 2.6211 trillion in the KOSPI market, nearly $1.8 billion, the highest daily figure in almost two months.
The report also cited an X post about a British man in his 40s who lost about KRW 400 million, or roughly $274,000, because of the recent slide in Korean stocks. He was said to be dealing with intense anxiety after seeing his principal damaged. According to the report, he said: "I just want to sell all my positions and live peacefully."
A market "master" lost KRW 1.5 billion in two months
Blogger "President Kim" shared another retail story, this one involving an investor who entered the market early and, during last year’s bull run, saw his account rise to KRW 2 billion, or about $1.36 million. People around him called him a "master" and followed his trades.
Then came the pullback. Over just two months, KRW 1.5 billion vanished. The report lists the investor’s inner script in phrases that are familiar to traders in both stocks and crypto: "This is only a correction." "This is actually a great buying chance." "If I buy more, my average cost will come down a lot." "If I just hold on a little longer, it will be fine."
The piece also cites Warren Buffett’s line: "Only when the tide goes out do you discover who’s been swimming naked." It argues that the "water" here is better understood as liquidity. When liquidity is abundant, strong returns can look like skill even when they mainly reflect greater risk-taking. Once liquidity tightens — because of high leverage, an imbalanced market structure, an elevated share of retail borrowing, interest-rate hikes by the Bank of Korea, and stricter entry requirements from brokerages — investors with weak risk controls are more exposed to a sharp unwind.
New investors are still entering the market
Even with repeated selloffs and liquidation waves, new investors continue to move in. The report points to two examples.
One is Kim Ha-young, a Seoul office worker in her 30s who started investing after receiving a rental deposit back when she moved out of an apartment last year. She said she had done no real investment research and simply chose SK Hynix and Samsung Electronics by instinct. Asked why, she replied: "When you think of Korea, don’t you think of Samsung first? Doesn’t that make the choice obvious?"
From September last year, shares of Samsung Electronics and SK Hynix climbed sharply. Kim originally planned to take profits after making KRW 50,000, or about $33, so she could stop spending mental energy on stock prices. Instead, she kept adding to her position and decided in February to hold both names for the long term. The report says the value of the two holdings has now more than doubled.
Kim said: "I know there’s a risk I could get carried away by rising or falling prices. Right now, I just want to let go of greed and move forward steadily." She said the investment might one day help her cover a down payment on a home by herself or prepare for retirement.
Another investor, Kim Do-hyun, who works at an AI startup in Seoul, expressed a similar view. As someone with ties to the semiconductor industry, he said he has long believed in the value of Korean blue chips. He entered the market during this bull run because of strong earnings expectations, adding that "in this rally, holding cash feels like a waste of resources."
Lee Jae-myung’s market push helped fuel the boom
The report says South Korea’s stock market has become one of the hottest retail trading arenas in recent years. The number of Korean stock investors rose from 6 million in 2019 to 14.5 million by the end of 2025. In May 2026, active trading accounts reached 105 million, up 6.93 million from the end of last year and roughly equal to the country’s total population. The KOSPI nearly doubled and outperformed major equity benchmarks globally.
The article ties that rise to the policy direction of President Lee Jae-myung, who took office last year. Early in his term, Lee said he wanted to change South Korea’s image as an "unattractive investment market" and eliminate the so-called "Korea Discount." The report explains that the term refers to the tendency for Korean stocks to trade at lower valuations than comparable global peers even when listed companies have strong cash flow and earnings. It points to the valuation gap between SK Hynix’s Korean and U.S. listings as one example.
Lee also publicly pledged to push the KOSPI to 5,000 when the index was at 2,800. According to the report, that target was reached in January this year. Although the KOSPI has now fallen nearly 30% from its record high, it is still up 55.5% for the year.
After taking office, Lee’s government introduced a series of market reforms aimed at reducing South Koreans’ dependence on property investment. One measure cited in the report would allow minority shareholders to concentrate their voting power behind their preferred board candidates. The broader goal was to make the stock market a second reservoir for household wealth.
The report notes that South Korea, described there as Asia’s fourth-largest property market, has some of the highest real-estate prices in the world. That has given many younger Koreans another reason to use leverage and loans to invest in equities. In a market this volatile, though, the same path can turn into a harsh lesson very quickly.
The article ends by saying no one can predict whether the KOSPI will return to its peak or whether the bull market can continue. What is clear, it says, is that a frenzy powered by policy, leverage and emotion is not unique to South Korea.