South Korea’s Margin Loan Addiction Fuels Retail Trading Crisis

The ease with which investors like Lee can access five-times leverage through mobile apps has pushed South Korea’s retail trading culture into dangerous territory. With total investor debt hitting an unprecedented 60 trillion won by late May, the Financial Supervisory Service is scrambling to contain a market that recently transformed from the world’s top performer into a theater of violent, double-digit plunges. Young graduates, facing property prices that demand 14 years of salary, increasingly treat the stock market as a high-stakes equalizer rather than a vehicle for steady growth.

Regulators have recently stepped in to ban new leveraged exchange-traded funds, a move critics describe as a necessary correction for a policy error made just months prior. While authorities warn that these products create asymmetric risks—accelerating losses far faster than gains—the appeal of rapid wealth accumulation remains potent. For many, the choice to leverage is not merely about speculation; it is a desperate attempt to bypass traditional economic barriers, even if it means risking everything on a single, volatile trade.