As the Kospi extends its rally, signs of overheating have reappeared in retail investors’ debt-fueled trading, prompting brokerages to tighten credit and step up risk controls.
According to the financial investment industry on the 22nd, KB Securities began restricting new purchases of SK hynix through contracts for difference, or CFDs, from 9 a.m. the previous day. CFDs are high-risk over-the-counter derivatives that settle only price differences without owning the underlying asset. Because they can be highly leveraged, losses can grow quickly when market volatility rises.
Mirae Asset Securities also adjusted margin requirements and stock classifications for some names starting that day. Twenty stocks — including Alteogen, HYBE, Kakao and LG Energy Solution — were moved up from group E to group F. Margin requirements for 10 stocks, including Hana Micron and Daeduck Electronics, were raised to 100% from 30% to 40%. Stocks set at 100% margin or placed in group F face limits such as restrictions on new margin-buying and extensions of loan maturities.
Toss Securities, after raising margin requirements to 100% the previous day for some stocks including Korea Information & Communication and Jusung Engineering, expanded the list that day to include Korea Airport and Samsung Electro-Mechanics preferred shares.
Kakao Pay Securities halted all new margin-buying orders, citing exhaustion of its credit limit. “Depending on market conditions, we are implementing additional risk-management measures such as adjusting margin requirements,” the firm said.
The moves follow a sharp rise in margin trading. Data from the Korea Financial Investment Association showed outstanding margin loans across the main Kospi market and the Kosdaq market topped 34 trillion won for the first time on the 17th, reaching 34.0279 trillion won, and then rose to 34.2592 trillion won on the 20th.
Market watchers said retail investors have been placing more aggressive leveraged bets as the Kospi set fresh record highs and expectations for further gains grew. Some also warned that momentum-driven buying aimed at quick profits could add downside pressure if volatility increases.
A brokerage industry official said leveraged investing can magnify losses as quickly as gains, calling for extra caution. The official said investors should approach carefully by closely weighing their ability to repay and their tolerance for risk, especially during periods of rising volatility.
* This article has been translated by AI.
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