Domestic Stock Market Predicted to Fall Due to Increased Short Selling...ETF Market Also Experiences Sharp Volatility

The war between the United States and Iran has entered its fourth week, showing signs of becoming prolonged, with short-selling activity emerging in the Korean stock market.

According to recent data from the Financial Investment Association, the balance of margin trading, seen as a signal predicting stock market declines, continues to increase. This margin trading involves institutional investors who hold stocks long-term lending their shares to other investors for a fee, often serving as a forward indicator of short-selling activity. Short selling refers to selling borrowed stocks first and buying them back at a lower price when the stock price drops, used when a decline in stock prices is expected.

Data from the Korea Exchange shows that, especially for the KOSPI index, the short-selling balance reached 15.3704 trillion won on the 16th, hitting a record high, and remained at a similar level the next day. Samsung Electronics and SK Hynix ranked first and second in margin trading balances, indicating that the stock prices of these companies may further decline. This trend is viewed as related to the instability in energy markets caused by the war and is seen as a preparation for market adjustments.

At the same time, volatility has been observed in the exchange-traded fund (ETF) market. Individual investors are showing clear signs of buying inverse products that bet on the index falling. Notably, the KODEX 200 Futures Inverse 2x ETF has attracted significant individual purchases, reflecting a strategy to pursue double returns when the index declines. Conversely, products that benefit from rising indices, such as the KODEX Leverage ETF, are experiencing selling pressure.

Against this backdrop, experts analyze that market opinions are becoming more diversified. Some investors are preparing for a decline, while others see it as a buying opportunity on dips. Experts predict that, in the long term, after fluctuations, the stock market may experience a faster upward trend.