A 24-year-old university student in South Korea said he plans to trade on margin again after a 5x leveraged bet that once lifted his account from KRW 20 million to nearly KRW 300 million ended in a forced liquidation and a total wipeout, according to a Reuters interview cited by ABMedia.
A six-month surge ended in a matter of weeks
The student, identified as Lee Seung-ho, put KRW 20 million saved during military service into the stock market after completing his enlistment. He activated 500% margin financing on his trading app, and his assets at one point climbed to nearly KRW 300 million, a gain of more than 15x in less than half a year.
That run did not last. Sharp swings in the KOSPI triggered a chain of forced liquidations over a period of several weeks, wiping out not only his profits but also all of his original capital.
In the Reuters interview, Lee said, “I can’t breathe at all.” The report described him speaking inside a studio apartment roughly the size of a parking space, with empty whisky bottles stacked in one corner and a fan sent by his brokerage after he was upgraded to VIP status.
He still argued that leverage remained the shortest path to financial freedom. “If I use five times leverage, I can accumulate wealth five times faster than other people,” he said.
Housing pressure and debt-fueled trading
ABMedia said Reuters used Lee’s case to show how common this line of thinking has become among younger South Koreans. In Seoul, the average home price is about 14 years of wages, leaving conventional saving and long-term financial planning out of reach for many. In that setting, high-leverage stock trading apps have become what some see as a “wealth equalizer.”
Lee said his ultimate goal is to buy an apartment in Seoul before starting a family. The report tied the spread of margin-fueled stock speculation among younger investors to a wider sense of financial pressure and limited mobility.
Data from the Korea Financial Investment Association showed margin balances in the domestic stock market reached a record KRW 38.63 trillion on June 24. A broader measure from the Bank of Korea showed total investor debt had exceeded KRW 60 trillion by the end of May, also a record level.
The timing overlapped with a six-month period in which the KOSPI doubled and became one of the world’s hottest equity markets. After that, the index repeatedly posted moves of more than 10% in just a few days, both up and down.
Brokerages, banks and regulators move to contain the risk
As systemic risk built up, brokerages, banks and regulators each began tightening controls, though the report said it remains unclear how much cooling these steps will produce.
On the brokerage side, major firms including Kiwoom Securities, Mirae Asset and Korea Investment started raising stock-specific margin requirements from late June. Samsung Electronics and SK Hynix, two names with heavy financing concentration, were among the first affected, and some stocks saw margin ratios raised to 100%.
Brokerages said the changes were meant to prevent liquidation cascades during fast selloffs and to ease the liquidity burden tied to clearing margin payments to the Korea Exchange, or KRX.
On the banking side, KB Kookmin, Shinhan, Hana, Woori and NH Nonghyup had already used 85.3% of their full-year household loan growth quotas by the end of June. Several banks said loan limits would be tightened across the board in the second half. If credit channels at banks narrow at the same time, the rally driven by leveraged money could lose support.
At the regulatory level, the Financial Supervisory Service, or FSS, announced on July 17 that it would ban new listings of leveraged ETFs linked to individual stocks. The head of the FSS said approval had been “too hasty” in the first place.
He says he understands the risk but will return to margin trading
Later in the interview, Lee said he understood the risk but still viewed leverage as his best route forward.
“I often compare trading to poker: if you go all in every time, you are bound to lose in the end. But if you stay disciplined and only deploy capital when the mathematical odds are heavily in your favor, it is actually hard to get shaken out repeatedly in a single trade,” he said.
He added, “Once I have rebuilt enough capital, I will continue using margin loans.”