Goldman Sachs' warning to Korean retail investors.

Goldman Sachs' warning to Korean retail investors.

The KOSPI plunged 10 percent from yesterday's high, despite no major negative developments.

In Korea, concerns about tax imposition and rebalancing are mentioned as catalysts, such as the inclusion of MSCI indexes, but that is not a real problem.

What I've emphasized and been concerned about lately is the unconventional increase in leveraged investment, which I've emphasized countless times through reports and posting.

Goldman also warned this loudly and strongly.

With the margin theory of South Korean retail investors at a record high of $26 billion, the current ratio of forced liquidation due to margin calls is four to five times higher than average.

Moreover, put options have also increased significantly, and some investors are already hedging, so in these markets, selling can lead to selling, which can lead to a sharp increase in volatility.

If everyone makes maximum long investments with leverage, adjustments can come even without bad news, and forced liquidation amplifies them.

And today, the Korean market showed this as it is.