What happened
Goldman Sachs data reveals that over 500,000 leveraged retail accounts in South Korea may have been completely liquidated as the KOSPI index has dropped approximately 18% since July 13. The Kobeissi Letter reported on X that as of July 13, more than 1.2 million leveraged retail trading accounts had triggered margin calls, with an estimated 320,000 to 360,000 accounts fully liquidated, representing about 3.4% of the adult population. With the subsequent market decline, the number of fully forced-out accounts is now estimated to exceed half a million.
Why it matters for the market
This wave of forced selling in South Korea's stock market may have broader implications, potentially spilling over into crypto markets as Korean retail traders face margin calls across asset classes. The sharp correction in KOSPI underscores heightened risk appetite and leverage within retail investor bases, which could amplify volatility in both traditional and digital assets.
What traders should watch
Market participants are closely monitoring the situation as further liquidation cascades may pressure liquidity and trigger additional downside. The episode highlights the vulnerability of heavily leveraged retail positions to sustained market declines, with potential short-term impact on intraday speculative trading sentiment.
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