South Korea Sees Record Forced Liquidations as SK Hynix Drops Over 15% and KOSPI Falls 9%

South Korean markets saw heavy deleveraging on Monday as chip stocks sold off sharply, with SK Hynix plunging more than 15%—its biggest single-day drop in 18 years—while the benchmark KOSPI fell over 9% and extended its decline to 25% from its June 22 record high. According to ChainCatcher, the sell-off unfolded during the Asian trading session as rising Middle East geopolitical tensions weighed on risk appetite. Data from South Korea’s Financial Supervisory Service showed total forced liquidations across the market reached 344.2 billion won in a single day, the largest credit-driven liquidation event so far this year. Retail investors accounted for 92% of leveraged positions and were described as “ant investors,” with many concentrated in memory-chip bets and viewed as having limited ability to withstand volatility. As of Monday, more than 1.2 million leveraged retail accounts had hit margin-call thresholds. About 320,000 to 360,000 accounts were fully liquidated by brokerages, wiping out principal in those accounts; some accounts reportedly ended up owing liabilities to brokers. Institutions cited in the report said the short-term “gamma effect” tied to leveraged short positioning in South Korea is unlikely to fade quickly, and that large-scale leveraged selling pressure has not been fully cleared, leaving ongoing volatility risk. They added that the decline was not driven by a reversal in industry fundamentals, but by a concentrated deleveraging of crowded, high-level leveraged positions following a macro shock.