KOSPI Drops 17% From Record High After 100% 2026 Gain as Forced Sales Hit 300 Billion Won

The KOSPI index fell 17 percent from its highs in one week after rising 100 percent for 2026 at its peak last week. ZeroHedge reported the decline triggered the largest wave of forced stock sales in years. Aggregated forced stock sales over the last few trading sessions approached 300 billion won, equal to about 197 million USD.

The Korea Times reported the figure as the largest such reading in recent memory. 1 percent on Friday, the highest of the year. 8 trillion won as of Monday, according to the Korea Financial Investment Association.

Forced sales occur when investors who borrowed from brokerages with 30-40 percent equity see equity fall below maintenance levels. Brokerages automatically sell positions at the opening call auction when margin maintenance levels are breached, with settlement by T+2.

Kim Seok-hwan, an analyst at Mirae Asset Securities, said the biggest risk during a sharp market decline is not the drop in prices itself, but forced liquidation.

He advised investors to reduce leverage, hold more cash and focus on high-quality assets. Noh Dong-gil, an analyst at Shinhan Securities, said much of the recently increased margin financing entered the market when KOSPI was trading in the 8,200-8,400 range.

He noted investors often begin trimming positions voluntarily once losses approach 15 percent, while the risk of forced selling rises around the 20 percent loss level.

Single-stock leveraged ETFs were launched in late May 2026. Retail investors in South Korea made aggressive leveraged bets on Samsung Electronics and SK Hynix while foreign investors were net sellers of Korean stocks. The article was published on June 10, 2026.