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As the Kospi fell for seven consecutive trading days and dropped to the 5,500 range, forced liquidations of stocks bought on borrowed money accumulated to around 300 billion won over the same period.
Amid growing stock market volatility, steady buying continued for domestic and foreign bonds, which are considered safe-haven assets.
According to the Korea Financial Investment Association on October 17, the actual forced liquidation amount relative to unsettled margin purchases totaled 298.1 billion won between October 6 and 15.
In particular, forced liquidations reached the 80 billion won range on October 14 (89.3 billion won) and October 15 (80.5 billion won).
Forced liquidation refers to the compulsory liquidation scale that occurs due to insufficient margins in stock trading.
If an investor fails to repay money borrowed from a securities firm or if the value of stocks deposited as collateral falls below a certain standard, the securities firm forcibly sells the held stocks without the investor's consent to recover the credit.
It is interpreted that as the Kospi plummeted, investors who bought stocks on borrowed money had less capacity to repay, leading to a sharp surge in forced liquidations.
The Kospi fell for seven consecutive trading days from October 6 to 15, dropping to 5,554.22.
However, it subsequently rebounded on October 16 for the first time in eight trading days, closing at 5,668.05.
Investor deposit funds, which act as standby capital in the stock market, stood at 96.9121 trillion won as of October 15, down 4.1% from October 6 (101.0486 trillion won).
Meanwhile, capital continued to flow into domestic and overseas bond markets.
Individual investors' net purchases of domestic bonds totaled 1.1617 trillion won from October 1 to 16 (total 10 trading days), maintaining a high level following the previous month's same period (October 1 to 14) of 2.0967 trillion won.
Last month's monthly net purchase of domestic bonds by individuals reached 4.0025 trillion won, marking the highest in two years and five months since April 2024 (4.5273 trillion won).
U.S. Treasuries also continued their net purchase trend for the fourth consecutive month.
According to KINDEX (Korea Securities Depository's securities information portal SEIBRO), domestic investors' net purchases of U.S. bonds this month (from October 1 to 15 based on the inquiry date) were tallied at 1.21 billion dollars (approx. 1.6132 trillion won).
After shifting from a net sale of 166 million dollars in June to a net purchase of 888 million dollars in July, the buying trend has continued through this month.
U.S. stock net purchases this month reached 3.5 billion dollars (approx. 4.7201 trillion won), about 3.5 times the level of the previous month (1 billion dollars).
It is possible that capital shifted to the U.S. stock market, which experienced a relatively smaller decline compared to the domestic market.
Seohak ants, domestic investors who invest in the U.S. stock market, made their largest net purchase over the past week in the Direxion Daily Semiconductor Bull 3X Shares (SOXL), a leveraged exchange-traded fund (ETF) that tracks 3 times the daily return of the U.S. semiconductor index, totaling 2.6013 billion dollars (approx. 3.4659 trillion won).
This was followed by KORU (235.36 million dollars), an ETF tracking the domestic stock market 3 times, and IonQ (103.44 million dollars), a U.S. quantum computing company.
This is interpreted as an increase in demand to "bet" on a rebound as the domestic stock market and semiconductor sector recently showed weakness.
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