<2> Selloff Descends into Rout in South Korea with Biggest One-Day Drop Since 2008
<3> Market Volatility Reaches Fever Pitch
The South Korean stock market has witnessed a catastrophic collapse, with the KOSPI plummeting by 20% in just two trading sessions. This unprecedented selloff has been triggered by excess leverage, which has led to a wave of margin calls and forced liquidation of positions by retail investors.
<4> Excess Leverage Triggers Margin Calls
In the current market environment, many retail investors have taken on excessive leverage to amplify their returns. However, this strategy has backfired, as the market has begun to decline. As a result, margin calls have been triggered, forcing investors to sell their positions to meet their obligations.
<5> Forced Liquidation of Positions
The forced liquidation of positions has led to a vicious cycle of selling, which has further exacerbated the market decline. This has resulted in a rout, with many stocks experiencing significant price drops. The KOSPI, which is the benchmark index for the South Korean stock market, has been particularly hard hit, falling by 20% in just two trading sessions.
<6> Biggest One-Day Drop Since 2008
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