At what stage has Korean stock deleveraging reached? See the detailed monitoring data of Korean retail investors' leverage displayed at http://(kimpemium. com) mentioned by Shenyu @ bitfish on Twitter. The website data is as of July 15th, and there is still one trading day for Korean stocks on the 16th. Let's talk about our understanding of a few data points: 1. Explicit financing debt: The balance of credit financing decreased from a peak of 38.6328 trillion on June 24th to 34.370184 trillion on July 15th, a decrease of 4.262616 trillion, or 11.03%. In nominal terms, it is still equivalent to 89% of the peak value. This is currently the closest indicator to 'how much explicit debt has been truly repaid'. It can be considered as returning to the level of April 2. R2=credit financing balance/investor deposit, At present, 31.283% is still in the 21st percentile of the past 10 years, which is not considered high from a static perspective. But looking at the changes: 1) From July 14th to July 15th: The amount of deposited funds decreased from 111.2825 trillion to 109.866972 trillion, a decrease of 1.4155 trillion; Credit financing decreased from 34.7078 trillion to 34.370184 trillion, a decrease of only 0.3376 trillion; R2 increased from 31.189% to 31.283%. 2) Looking back at the end of June to July 15th: Credit financing decreased by 7.92%, custody funds decreased by 9.67%, and R2 increased by 0.594 percentage points instead. The core issue is that debt is decreasing, but the cash safety cushion for remaining investors is falling faster. The liquidity buffer has not improved synchronously and has even become thinner. This is more important than simply looking at the absolute quantile of R2. 3. On July 16th, personal net buying of 4.78 trillion yuan: haven't seen a surrender plunge yet Take out the data that can be seen on July 16th. On that day, individual investors bought a net of 4.78 trillion yuan in the KOSPI market, while foreign investors and institutions sold a net of 1.93 trillion yuan and 3.05 trillion yuan respectively. And the typical ending of a purge usually includes: Retail investors have shifted from buying at the bottom to actively selling, with the stabilization or rebound of custodian funds, accelerated decline in credit financing, continuous net redemptions of leveraged ETFs, and a pullback after a strong flat peak. What we see now is that institutions and foreign investment are reducing their risk exposure, while individuals are continuing to absorb risks. These buying funds may come from existing cash, selling other assets, or adding leverage, which is currently unclear. But the large-scale bottom fishing at least indicates that the market behavior has not yet formed a comprehensive risk aversion and surrender. 4. Qiang Ping is still in the high-pressure range As of July 15th, the 5-day average of forced liquidation was 62 billion Korean won, still in the 99% percentile of 10 years. The daily forced liquidation was 38.5 billion Korean won, accounting for 3.8% of outstanding payments, far below the threshold of 10% "liquidation day". The forced liquidation statistics from the Korea Financial Investment Association mainly cover short-term unsettled transactions, and do not include mandatory liquidation of all credit financing accounts and guaranteed loans. Therefore, this number is a proxy indicator for pressure, not the total amount of mandatory sales. The strong flat data after the sharp decline on July 16th has not yet come in, and the actual pressure may be higher than what we see now. 5. The scale of leveraged ETFs is not small yet In addition to traditional credit financing, the embedded leverage scale of leveraged ETFs is 24.2 trillion Korean won, and it can even be seen that as of July 15th, only the 13th was a net redemption, while the rest of the trading days in July were still net subscriptions. This means that the explicit financing portfolio has decreased, but the leverage exposure of productization and ETFization is still heavy. Investors did not increase leverage through their accounts, but through leveraged ETFs. In the later stage of deleveraging, it should be checked whether the circulating shares have been cancelled by authorized participants, that is, a continuous large number of net redemptions have occurred. So the overall judgment is: In the middle and later stages of explicit financing deleveraging, the cash buffer has not improved, and the mechanical reduction of ETF positions is severe. However, there have been no typical signs of surrender in retail investors' behavior towards the end of liquidation. The overall progress from deleveraging to the middle and later stages should not have reached the final clearance stage yet. Follow up closely: Does the balance of credit financing continue to decline significantly Has the deposit stabilized Has R2 decreased Is there a sustained net redemption of leveraged ETFs, And whether the 5-day mean of the strong flat has peaked and fallen back. Why pay attention to the degree of deleveraging? To be honest, it is not possible to accurately determine the stage of deleveraging, but since the market adjustment is triggered by deleveraging, whether the market can truly stabilize depends on whether the leverage is truly cleared, at least by clearing the vast majority. The price decline itself does not prove how much financing debt has decreased, it only reprices the risk assets.