[South Korean Retail Investors Increase High-Leverage CFD Positions, Holdings Rise to 3.3 Trillion Won, Chip Stock Leverage Risks Draw Attention] BlockBeats News, July 22 – South Korean retail investors are once again heavily buying high-leverage contracts for difference (CFDs). According to data from the Korea Financial Investment Association, as of July 21, the total CFD holdings in South Korea had risen to approximately 3.3 trillion won (about $2.2 billion), an increase of nearly two-thirds compared to a year ago. The data shows that SK Hynix and Samsung Electronics have become the most concentrated leverage targets for South Korean retail investors. Over the past year, SK Hynix's CFD holdings surged nearly 2,500% to 235 billion won, while Samsung Electronics' CFD holdings expanded to approximately 217 billion won, five times the previous amount. CFDs allow investors to gain full exposure to the underlying asset's risk by paying only about 40% of the margin, but investors do not actually own the stocks. Analysts point out that when market declines trigger margin calls, banks may sell off the spot stocks they hold to hedge risks, thereby amplifying market volatility. The market is concerned that the risks associated with CFDs, combined with products like margin financing and leveraged ETFs, could create a chain reaction of forced liquidations during market corrections. The Korea Capital Market Institute stated that if a large number of leveraged positions are concentrated in the same direction and investors fail to meet margin requirements, forced liquidations could further exacerbate market volatility. In 2023, South Korea experienced a wave of retail CFD position liquidations due to concentrated holdings, leading to multiple stocks hitting consecutive lower limits and prompting regulatory crackdowns. Analysts believe that as South Korean retail investors once again increase high-leverage trading, similar risks are drawing renewed market attention. [Original Link]