Korean investors have never borrowed this much money to buy stocks:

South Korean margin loans reached a record of about $26 billion, doubling since the beginning of 2025.

However, as a percentage of South Korea's free-float shares (the portion of market value available for public trading), margin loans fell to about 0.8%, the lowest level since the pandemic lows of 2020.

This occurred as a surge in market capitalization far outpaced the growth in leverage.

Meanwhile, during the recent market pullback, the daily forced liquidation ratio surged to 4-5% of total outstanding margin loans, far above the normal level of about 1%.

This means brokers were forced to liquidate 4%-5% of all margin-backed positions in a single day because borrowers could not meet margin call requirements.

Record leverage is exacerbating market volatility in South Korea.