1.2 million accounts trigger protection, South Korean stock market has entered mandatory deleveraging stage As I mentioned earlier, the biggest trouble with the recent decline in the South Korean stock market is the simultaneous emergence of financing accounts, leveraged ETFs, and foreign capital withdrawals. Now that retail financing accounts are being forced to sell by securities firms, it means that the negative impact of high leverage is already beginning to erupt. As of July 13th, over 1.2 million individual leveraged accounts in the South Korean market have triggered margin calls, of which approximately 320000 to 360000 accounts have been forcibly liquidated by securities firms. Roughly comparing the number of accounts and the working age population in South Korea, it is equivalent to one account for every 30 people being involved in insurance claims. The scale of Korean retail investors borrowing money to enter the market has reached a record high of 60 trillion Korean won by the end of May. Funds are highly concentrated in Samsung Electronics and SK Hynix, with a financing balance of over 10 trillion Korean won for these two stocks alone. Combined with Samsung Electronics preferred stock and SK Square, these four stocks account for 41.1% of KOSPI's financing balance. This means that once both Hynix and Samsung experience a simultaneous decline, the impact will quickly spread from their stock prices to the entire financing system. The decline in stock prices has led to a reduction in account collateral, prompting securities firms to request additional margin. Accounts that cannot be replenished are forced to sell, and new selling orders continue to drive down stock prices, triggering the next round of follow-up guarantees. On July 16th, KOSPI fell again by 6.37%, SK Hynix fell by 11.62%, and Samsung Electronics fell by 8.23%. Since July, forced sales due to failure to replenish funds in a timely manner have reached approximately 452 billion Korean won, with an average daily increase of over 50 billion Korean won, nearly twice the average daily level in the first half of the year. At this stage, it is difficult for the company's valuation and long-term fundamentals to prevent selling in the short term. When dealing with financing defaults, securities firms do not consider whether Hynix is a long-term beneficiary of AI and HBM. They only sell assets with liquidity in their accounts to fill the margin gap. The regulatory authorities in South Korea have now suspended the listing of new single stock leveraged ETFs and raised the minimum cash balance required to invest in such products from KRW 10 million to KRW 30 million. But by the time regulation starts to hit the brakes, leverage has already entered the market, and policies themselves may even stimulate some investors to exit early, continuing to increase short-term volatility. The leveraged funds that previously drove up the South Korean stock market have now turned into sustained selling pressure. The South Korean stock market has also officially entered the stage of retail balance sheet contraction and passive deleveraging from a high volatility market. That's also the main reason why I chose to short SK Hynix, because it's like a series of DeFi thunderbolts, the more the decline, the more leveraged funds will burst, and then retreat into a price drop. @Gate Crypto、 US stocks, Hong Kong stocks, South Korean stocks, gold CFD、 Predicting one-stop trading in the market