[E-Daily Reporter Kwon Oh Seok ] Amid a booming stock market, the number of retail investors seeking high-risk, high-return investments has increased, leading to a simultaneous surge in forced liquidations resulting from “debt-fueled investing” (investing with borrowed money) by professional retail investors and margin trading. In particular, in July—when the stock market correction began—the average daily value of forced liquidations at major domestic securities firms reached 43.9 billion won, a 13-fold increase compared to the previous year.

According to data submitted by the Korea Financial Investment Association to Rep. Park Seong-hun of the People Power Party, a member of the National Assembly’s Political Affairs Committee, the number of individual professional investors stood at 26,282 as of the end of July this year.
The number of individual professional investors had been on a downward trend, falling from 26,672 at the end of 2022 to 20,820 at the end of 2024, but after rebounding at the end of last year (22,495), it has increased for seven consecutive months this year. On a monthly basis, the numbers rose steadily: △23,018 in January △23,774 in March △25,151 in May △26,282 in July.
This represents an increase of 3,787 people (16.8%) in just seven months; the number of new registrants from January through July (11,173) has already reached nearly 91.4% of last year’s total annual new registrants (12,228). By brokerage firm, Samsung Securities had the highest number with 3,517, followed by Korea Investment & Securities (3,473), Kiwoom Securities (3,203), and Mirae Asset Securities (3,154).
Once registered as a professional individual investor, one gains access to high-risk products such as contracts for difference (CFDs), and regulatory protections intended for retail investors are relaxed; however, investment risks also increase accordingly.
The problem is that, as the market entered a downturn amid a surge in leveraged investing fueled by the stock market rally, a massive wave of forced liquidations ensued. For 10 domestic securities firms, forced liquidations related to margin trading and securities-backed loans averaged 2,258 accounts and 43.868 billion won per day in July of this year. Compared to the same month last year (622 accounts, 3.377 billion won), the number of accounts surged 3.6-fold, and the amount surged 13-fold.
The trend in forced liquidations surged from a daily average of 2.947 billion won in January of this year to 8.274 billion won in May and 20.414 billion won in June, before surpassing 40 billion won in July. This marks the highest monthly daily average on record since statistics began being compiled in 2022.
Margin calls occur when a stock price falls and the collateral ratio drops below the threshold, prompting securities firms to forcibly liquidate the shares. When large volumes of shares are released into the market during a downturn, this creates a vicious cycle that fuels further market declines.
While the risk of forced liquidation and losses has increased following the recent introduction of high-risk products—such as single-stock leveraged ETFs (exchange-traded funds)—critics argue that the authorities have merely reacted belatedly, such as suspending new listings just two months after their debut and raising margin requirements.
Rep. Park pointed out, “The fact that the number of individual professional investors has skyrocketed to nearly 3,800 in just seven months is a signal that financial authorities must not take lightly,” adding, “We must not allow the designation of ‘professional investor’ to be used as a cover to undermine investor protection or as a loophole to circumvent regulations on the sale of high-risk products.”
He added, “Rather than shifting the risk onto individuals under the pretext of expanding investment options, we must urgently establish effective investor protection measures to prevent opposing trades and chain reactions of losses.”