A bull market is drawing more retail investors into derivatives, intensifying marketing competition among brokerages. Firms are cutting fees and offering gift-card promotions. Experts warn that if the rally fades, losses from leveraged derivatives trading could fall squarely on individuals.
According to the securities industry on the 23rd, brokerages are stepping up campaigns tied to domestic derivatives. Brokerage A said it will offer up to three months of discounted fees for domestic futures and options customers and provide gift cards to clients who meet trading requirements. Brokerage B is targeting new and inactive customers with gas gift cards, cash and fee coupons to spur first trades. Brokerage C is offering cash for completing education and additional rewards based on trading volume. The industry is broadly competing on incentives to expand domestic derivatives trading.
The shift is also seen as a response to tighter oversight that has made aggressive marketing harder for overseas stocks and overseas derivatives, pushing firms to focus on domestic derivatives, which face relatively fewer restrictions.
Brokerage results from last year underscore the trend. As of the end of last year, brokerages’ fee income from domestic derivatives (excluding overseas) totaled 508.9 billion won, up 13.8% from 447.1 billion won a year earlier. Over the same period, interest income from credit provision rose 8.5% to 3.1073 trillion won from 2.8626 trillion won. The structure rewards higher trading volumes with more fees, and expanding debt-funded investing boosts interest income.
Still, responsibility for investment decisions and losses rests with individuals, prompting calls for caution. Futures and options are typical leveraged products that allow large positions with small margin deposits, meaning losses can multiply if investors bet the wrong way. Margin trading carries similar risks.
Data from the office of Rep. Heo Young, a member of the National Assembly’s Political Affairs Committee, show individual investors posted cumulative losses of about 3.667 trillion won in domestic derivatives from 2020 to 2024. Losses were recorded each year over the five-year period, though the first half of 2025 saw a profit of 326.3 billion won. Heo said investors who meet eligibility requirements may mistakenly believe they are fully prepared for high-risk trading and take on excessive speculation, adding that brokerages’ sales practices that stoke get-rich-quick sentiment through promotions should be examined.
Financial authorities, meanwhile, have not issued specific warnings on exchange-traded domestic derivatives. They highlighted risks in leveraged ETFs and overseas derivatives trading late last year and early this year, but have provided no separate guidance for domestic exchange-traded derivatives. A Financial Supervisory Service official said there are no plans yet to respond regarding domestic derivatives, adding that exchange-traded derivatives are handled by investors who have completed education, making them different from products such as ETFs traded by the general public.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.