Retail Investors Lash Out After $45.7 Million in Forced Sales in a Day as Korea Stock Cash, Margin Balances Hit 2026 Lows

Investor deposits at 85.2208 trillion won ($61.8 billion), lowest this year

Margin loan balances also fall to a 2026 low of 26.5494 trillion won ($19.2 billion)

South Korea’s stock-market slide has driven both sidelined cash and borrowing for stock purchases to their lowest levels of the year. The drop is adding to concerns that the domestic market’s retail-investor base could weaken as individuals turn their backs on the Kospi.

Data from the Korea Financial Investment Association showed investor deposits, a pool of cash waiting to be deployed into stocks, stood at 85.2208 trillion won ($61.8 billion) as of Nov. 10, down 3.0331 trillion won from the previous day. That was the lowest level since Dec. 24, 2025, when the balance was 83.034 trillion won, and the weakest reading so far this year. Investor deposits had reached a record 139.6948 trillion won on June 4 before turning lower as the market correction deepened. They fell below 100 trillion won on Oct. 14 and then below 90 trillion won on Oct. 21.

Investor deposits are funds that individual investors leave in brokerage accounts to buy shares but have not yet invested. Because the money represents cash on the sidelines for stock purchases, it is viewed as a barometer of market activity. If an investor puts 10 million won into a brokerage account, buys 7 million won of Samsung Electronics shares and leaves 3 million won unspent, that remaining 3 million won counts as investor deposits.

Investor sentiment has also cooled rapidly after the Kospi underwent a steep correction last month, sliding from the 7,000 level to the 5,500 range. With less standby cash available to support a rebound, retail investors’ ability to buy on dips is also diminishing.

Margin loan balances, used by investors to buy stocks with borrowed money, also fell sharply. The balance stood at 26.5494 trillion won ($19.2 billion) on Nov. 10, down 1.5211 trillion won, or 5.42%, from the previous trading day, marking the lowest level this year. The one-day decline was the second largest of 2026 after a 3.2181 trillion won drop on July 31. Loans backed by pledged securities also fell, declining by 479 billion won to 25.4867 trillion won.

Forced selling tied to unpaid balances in consignment trading has also increased since the recent market plunge. Actual forced liquidations linked to those receivables totaled 63.041 billion won ($45.7 million) on Nov. 10, up 66.3% from the previous trading day. That was the largest amount since Oct. 15, when it reached 80.498 billion won. The Kospi had earlier fallen 5.28% on Nov. 5 and 6.02% on Nov. 6, for a two-day drop of 10.98%. The index slid from 5,683.80 on Nov. 4 to 5,059.69 on Nov. 6, then closed down another 0.81% at 5,018.85 on Nov. 9.

Forced selling widened with a lag after the selloff. It rose from 7.022 billion won on Nov. 6 to 37.915 billion won on Nov. 9 after the weekend, then climbed to 63.041 billion won on Nov. 10. The two-day total for Nov. 9 and Nov. 10 reached 100.956 billion won.

In unsettled trading, investors pay only part of the purchase price upfront and must provide the rest by settlement. If they fail to cover the shortfall, brokerages can forcibly sell the shares. Because there is a gap between the trade date and settlement, forced liquidations tied to earlier unpaid balances can continue even if share prices rebound.

That happened on Nov. 10, when the Kospi rebounded 4.39% but forced selling still increased. Forced liquidations as a share of unsettled balances rose from 0.8% on Nov. 6 to 4.2% on Nov. 9 and 5.7% on Nov. 10.

Retail interest in the domestic stock market is also fading. Some analysts say money leaving Korean equities is flowing overseas instead. Hur Jae-hwan, an analyst at Eugene Investment & Securities, said customer deposits, which serve as standby funds for stock purchases, are coming in far more slowly than the Kospi’s moves would suggest. In his view, enthusiasm for the domestic stock market has cooled.

Since July, retail money has been moving from Korea to the US, according to Kang Hye-sung, an analyst at SangSangIn Securities. A stronger won since August has spurred demand to convert into dollars and reduced the appeal of investing at home, he said.

One investor said it used to make sense to pick companies with solid earnings, hold on or average down when share prices fell. Now, that logic no longer works, the investor said, lamenting that retail traders have little chance of absorbing selling when foreign investors dump shares worth tens of trillions of won.

Another retail investor said the stock market increasingly feels like a venue dominated by foreign and institutional investors rather than individuals. For now, staying away from the Kospi seems like the most efficient investment strategy, the investor said, adding frustration that the government appeared to be doing little as the market deteriorated.

Kang Hye-seong, Hankyung.com reporter memory@hankyung.com