Korean Stocks Hit 7 Circuit Breakers This Year: The Summer Ruined by Youth Leverage

Original｜Odaily (@OdailyChina)

Author｜Wenser (@wenser 2010 )

On June 16, the meme "Korean girls cheer for the arrival of humanity's golden age" went viral across the internet. Three days later, the KOSPI index hit an intraday all-time high of 9,385 points, seemingly validating the golden age predicted in the post.

However, arriving before the "10,000-point" mark was an epic crash.

Over the past month, South Korea's entire market circuit breakers (suspending all trading) have been triggered a total of 4 times, all on the downside; the KOSPI market triggered the KOSPI sidecar mechanism (suspending programmatic trading) 38 times, and the KOSDAQ (junior board) market triggered it 22 times, far exceeding the total for the entire year during the 2008 financial crisis.

The KOSPI index experienced a maximum drawdown of 32% from its all-time high, triggering a wave of deleveraging.

As of mid-July, the cumulative amount of forced liquidations in South Korea for the month had reached 344.2 billion KRW; over 1.2 million margin retail accounts across the entire market hit margin call levels, with approximately 320,000 to 360,000 of these accounts being fully liquidated by brokerages — meaning roughly 1 in every 30 Korean adults (about 3.4%) faced a liquidation risk; retail investor margin deposit balances evaporated by nearly 30 trillion KRW compared to the end of June, falling to 107.1 trillion KRW, the lowest level since June 2020.

Volatility persists. Behind the repeated circuit breakers lie the tragic stories of countless Korean retail investors — selling at a loss, facing leveraged liquidations, and losing everything.

Celebrity Seo Dong-ju "Bagholding" SK Hynix at "Floor 259"

On July 13, Korean celebrity Seo Dong-ju revealed on his YouTube channel Money Trap that he bought SK Hynix at a high price of 2.59 million KRW; with the stock price falling back to 1.84 million KRW, he joked about being "a Korean ant trapped on the 259th floor."

When asked about his outlook for the market, Seo Dong-ju said: "I think I should wait and see. Although I say that now, I'm actually really anxious inside. Sometimes, looking at the continuously declining numbers on my phone screen, I find myself shouting without realizing it."

In this crash, Seo Dong-ju's situation is far from unique.

Video blogger "Lalal" shared a meme saying "There's someone on the 280th floor too," mocking himself for buying SK Hynix at 2.8 million KRW and getting trapped — his account lost 44% (2.294 million KRW) last month and continued to plunge this month. Korean comedian Mija also revealed he lost 100 million KRW from stock trading.

The relentlessly falling Korean stock market has also turned the "stock price floor meme" into a trend on Instagram and short-video platforms, becoming a powerful and relatable form of self-deprecating emotional expression among Korean youth.

Korean Veteran Lee Seung-ho: Maxed Out Leverage, Lost 300 Million KRW in a Month

A Korean military veteran named Lee Seung-ho bet his entire net worth and experienced a journey from heaven to hell in this stock market frenzy.

Lee Seung-ho, 24 years old, saved 20 million KRW in principal during his military service. Riding the stock market wave, he went all-in, using leverage to buy a single stock. Its paper value once soared to 300 million KRW, creating a "15x get-rich-quick myth."

"We live in an era where we can't afford real estate assets, so stock investment became my only hope to turn things around." He admitted that the price of an ordinary apartment in Seoul equals 14 years of income for a young person without spending anything. Excluded from traditional paths of asset accumulation, high-leverage investing is seen as the only way to bridge the wealth gap.

But when the tide went out, the crash of his single concentrated position not only wiped out his 280 million KRW in paper profits but also vaporized his hard-earned principal. More fatally, Lee had also used credit loans and leveraged products to amplify his investment scale, ultimately pushing himself into an abyss.

A gambler's comeback bid ended in a more complete zeroing out. Lee Seung-ho is not an isolated case among Koreans who trade stocks using leveraged assets like credit loans.

According to data from South Korea's financial industry, as of the end of June, the total household loan balance (excluding policy loans) of the five major commercial banks — KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup — stood at 647.58 trillion KRW, an increase of 3.70 trillion KRW compared to the end of last year. This amount already accounts for 85.3% of the annual loan ceiling, leaving only about 639.5 billion KRW for the rest of the year.

Today's market for borrowing to invest in stocks is already overcrowded, and the Korean stock market has entered an "era of super-lending."

Fan Stabs Stock Influencer After Losses in Paid Group

On July 13, as the Korean stock market fell again, triggering a market-wide circuit breaker.

That day, a man in his 20s from the Busan area stabbed a man in his 40s and fled. As the case unfolded, the truth was shocking — this was a bloody incident triggered by a "KOL's stock recommendations causing massive losses for followers."

The victim was a YouTuber running a stock channel (suspected to be WinnersTV), who had repeatedly and fanatically urged followers in paid livestreams to go all-in on investments. He said things like, "Sell your underwear if you have to, but buy this stock," "Learn to use margin bonds flexibly," and even encouraged followers to sell their cars and gold to fully bet on leveraged semiconductor stock products.

Many followers faced forced liquidations due to the market crash, losing everything. According to Busan police investigations, the attacker was a subscriber to the channel who, after following the YouTuber's stock recommendations, suffered significant losses, saw his life ruined, and attacked out of rage. The YouTuber was later referred to prosecutors on suspicion of being an "unlicensed investment advisor."

A farce of paid stock tips ultimately ended in bloodshed.

British Investor in his 40s Loses 400 Million KRW in Korean Stocks

This seemingly frenzied Korean stock investment feast also attracted the participation of many foreign investors.

Data from the Korea Exchange shows that from July 20 to 23, foreign investors were net buyers of Korean stocks for 4 consecutive trading days, with cumulative net purchases reaching 5.574 trillion KRW (approximately $3.8 billion). This was the first four-day consecutive net inflow since April. On July 22 alone, foreign investors net purchased 2.6211 trillion KRW (nearly $1.8 billion) on the main board, the highest record in nearly two months.

As shared by an X platform blogger, a British man in his forties lost approximately 400 million KRW (about $274,000) due to the recent sharp decline in Korean stocks.

Stricken by the principal loss, the man is currently in a state of extreme anxiety. According to him: "I just want to sell all my holdings now and live peacefully."

Unfortunately, all lessons in the stock market come at the cost of real money. And if the market were to rebound significantly after selling, it's hard to imagine anyone could remain rational; they might even regret their trading decisions even more.

Korean Stock "Master" Sees Net Worth Shrink by 1.5 Billion KRW in 2 Months

Blogger "Director Kim" shared the story of a real retail investor who fell from grace to darkness.

This investor entered the market early. At the peak of last year's bull run, his account soared to 2 billion KRW (about $1.36 million). People called him a "master," praised his talent, and followed his investment moves. He was the talk of the town. But in just two months, as the market corrected, 1.5 billion KRW vanished into thin air.

Interestingly, his psychological trajectory is strikingly similar to that of every crypto player and seasoned stock trader:

"This is just a correction."

"This is actually a great buying opportunity."

"If I buy more, my average cost basis will be much lower."

"If I just hold on a bit longer, everything will be fine."

As investing legend Warren Buffett said: "Only when the tide goes out do you discover who's been swimming naked."

Many interpret the "tide" here as the entire market, but it more accurately refers to market liquidity. When liquidity is abundant, everyone looks like a genius. However, high returns are not necessarily a sign of investing skill; sometimes, they are merely the result of taking on greater risk.

When the Korean stock market fell into a liquidity crunch due to excessive leverage, an imbalanced market structure, an excessively high proportion of retail loans, as well as central bank rate hikes and higher entry barriers set by brokerages, those lacking risk management were inevitably dragged into the abyss by the wave of the crash.

New Investors Keep Flooding In

Despite the frequent crashes and massive liquidations in the Korean stock market, it hasn't deterred newcomers eager to ride the wave. The stories of the following two young investors are a perfect illustration.

Kim Ha-young, a Seoul office worker in her 30s, first ventured into stock investment last year after receiving a housing deposit back from terminating her apartment lease. "I didn't do any research at all, I just chose SK Hynix and Samsung Electronics based on intuition." When asked for her reasoning, shereplied without a second thought: "When you think of Korea, isn't Samsung the first thing that comes to mind? Isn't that choice obvious?"

Starting last September, as Samsung and SK Hynix stocks soared, she initially planned to "take a profit of 50,000 KRW (about $33) and be done," thinking it would free her from the torture of being preoccupied with stock prices. But watching the price keep rising, she chose to keep adding to her position and decided in February to hold these two stocks for the long term. Now, the market value of both stocks has more than doubled.

Kim Ha-young admitted: "I know there's a risk of being swept away by the rising or falling prices. I just want to let go of greed and stay steady now." In her vision, she might one day be able to afford a down payment on an apartment on her own or prepare for retirement in advance.

Kim Do-hyun, from an AI startup in Seoul, shares similar thoughts. As someone "half-inside the semiconductor industry," Kim Do-hyun has always believed in the market value of Korean blue chips. He was also drawn into the stock market by the current bull run and optimistic earnings outlook. In his view, "Holding cash during this rally feels like a waste of resources."

Blue House Engineered the Korean Stock Bull Market

The Korean stock market is absolutely boiling, and the data speaks for itself: The total number of Korean stock investors surged from 6 million in 2019 to 14.5 million by the end of 2025; in May 2026, active trading accounts reached 105 million (a net increase of 6.93 million from the end of last year), approximately double South Korea's total population; the KOSPI index nearly doubled, leading the world's major stock indices.

All of this is inextricably linked to Korean President Lee Jae-myung, who took office last year.

At the start of his term, he made a high-profile promise to completely change Korea's image as a "cold place for investment" and eliminate the negative perception of the "Korea Discount". (Odaily Note: The English term 'Korea Discount' refers to the phenomenon where Korean stocks are undervalued compared to global peers. Specifically, many listed Korean companies show strong cash flow and earnings performance, yet their stock prices remain below book value and are significantly undervalued compared to overseas counterparts. This is particularly evident when comparing SK Hynix's stock price on the Korean and US exchanges.)

Furthermore, Lee publicly pledged to push the KOSPI index to 5,000 points — at the time, the index was only around 2,800 points. This goal was achieved in January of this year. Although the KOSPI has since fallen nearly 30% from its all-time high, its year-to-date gain still stands at an impressive 55.5%, far ahead of other major global capital markets.

After taking office, to reduce Koreans' reliance on real estate investment, the Lee Jae-myung administration introduced a series of stock market reform measures. These included "allowing minority shareholders to concentrate their voting power on candidates they support when electing board members," aiming to make the stock market a second reservoir for investment.

Of course, Lee's approach is understandable. As Asia's fourth-largest real estate market, Korea's real estate sector has become one of the most expensive in the world. Such high housing prices have given many young Koreans ample reason to "use leverage for stock trading" and "take out loans to invest in stocks." However, the violent market fluctuations have ultimately given them a bloody lesson in investing.

Whether the KOSPI can reclaim its peak and whether the bull market melody can continue is something no one can predict. But one thing is certain: This frenzy, spawned by policy, fueled by leverage, and driven by emotion, is far from unique to Korea. From Wall Street to Tokyo to Seoul, every generation of young people has gambled on the future in its own era's "betting game" and paid the price for some grand narrative. The story of Korean youth is merely another vivid replication in the long river of history — they are neither the first, nor will they be the last.