Korean university student's 5x leveraged stock trading returns once surged 15 times, but evaporated after market correction

Odaily Planet Daily News: Lee Seung-ho, a 24-year-old South Korean university student, used a 5x leverage trading feature on a trading app, turning 20 million won he saved during his military service into nearly 300 million won, about 15 times his initial capital. However, after a sharp fluctuation in the South Korean stock market in May this year, his brokerage firm triggered forced liquidations, and all related gains evaporated within four weeks, with his account balance ultimately falling below the initial investment.

Lee stated that while high leverage accelerates wealth growth, consistently betting with full positions can ultimately lead to losses. Data from the Korea Financial Investment Association shows that the balance of margin loans in the South Korean stock market reached a record high of 38.63 trillion won on June 24, and still stood at 34.37 trillion won as of July 15.

During the same period, the KOSPI index more than doubled within six months, but subsequently experienced multiple declines of over 10% within a few weeks. South Korean regulators have announced a suspension of new listings for leveraged ETFs linked to single stocks and stated they will strengthen risk management when market volatility intensifies. (Reuters)