[Edaily Reporter KWON HYE-ME ] As the KOSPI has plummeted 40% from its one-month high, retail investors who had engaged in “debt-fueled investing” are exiting the market.

According to the Korea Financial Investment Association on the 4th, the outstanding balance of margin loans stood at 27.4438 trillion won on the 3rd, the first trading day of this month.

Following a drop below 30 trillion won (28.9349 trillion won) at the end of last month—the first time in about half a year—the balance fell by another 1.4911 trillion won compared to the previous trading day. This is the lowest figure of the year since January 2 (27.4207 trillion won).

Compared to the all-time high recorded on June 24 (38.6328 trillion won), this represents a decrease of 11.2 trillion won—roughly one-third of the previous total.

In particular, as the KOSPI plunged 10.84% in a single day on the 28th of last month and fell another 5.98% on the 29th, the collateral value held by margin trading investors rapidly declined. With both voluntary repayments by investors seeking to avoid forced liquidation and forced liquidations by securities firms increasing simultaneously, the margin lending balance fell by more than 3 trillion won in a single day on the 31st of last month, reaching 28.935 trillion won.

By market, the balance on the KOSPI market fell by 1.2 trillion won to 21.614 trillion won, while the KOSDAQ market balance decreased by approximately 270 billion won to 5.8297 trillion won. However, this marks the first time in about six years—since June 3, 2020 (5.903 trillion won)—that the KOSDAQ market balance has fallen to the 5 trillion won range.

This is believed to be due to the extreme volatility and market correction that have recently swept through the domestic stock market, causing a contraction in margin trading.

Investor deposits—which represent funds on standby for the stock market—also approached the 100 trillion won mark again on the 3rd, reaching 102.8255 trillion won. This figure represents a decrease of 1.3098 trillion won from the previous session and is the lowest level since February 3 (99.2735 trillion won).

However, the amount of forced liquidations resulting from margin trading fell significantly compared to the end of last month, totaling 22.3 billion won. On the 30th and 31st of last month, the scale of forced liquidations reached 103.7 billion won and 122.0 billion won, respectively.

Over the past month, the total value of forced liquidations amounted to 992.7 billion won, approaching 1 trillion won. While this figure is lower than that of June (1.1228 trillion won), it represents a significant increase compared to May (707.6 billion won) and April (264.1 billion won).