When sharp surges and crashes become routine, South Korea’s stock market is gradually turning into a "meme market"

Odaily Planet Daily News: The volatility of South Korea's benchmark stock index has reached extreme levels, prompting investors and analysts to compare the dramatic intraday swings to the "meme stock" frenzy. Although this comparison might sound exaggerated at first, given that the Kospi index is supported by strong earnings from the world's leading chipmakers, it is not without merit.

With retail investor interest heating up, the Kospi index has already seen 20 trading days this year with a closing change of at least 5%, compared to just 2 times in the whole of 2025. Samsung Electronics has had 8 trading days with a change of 10% or more this year, compared to zero last year; SK Hynix has seen 11 such instances this year, versus 2 times in 2025. This is reminiscent of the frenzy surrounding stocks like GameStop and Bed Bath & Beyond (BBBY) during the retail investor craze. A major driver of the volatility surge is the aggressive buying of leveraged ETFs on individual stocks by retail investors.

Furthermore, the increasing dominance of these two heavyweight stocks has also amplified the volatility. According to Goldman Sachs estimates, a 5% swing in the South Korean stock market could trigger approximately $4.7 billion in ETF rebalancing flows, as options dealers need to adjust their risk exposure. This scale is equivalent to about one-eighth of the average daily trading volume in the Korean stock market. (Jinshi Data)