'I couldn't breathe': South Korea's frenzied stock trading exposes margin loan risks

According to the Korea Financial Investment Association, margin loan balances in the domestic stock market reached 38.63 trillion won on June 24, the highest level on record. As of July 15, balances were 34.37 trillion won.

Broader Bank of Korea data, which includes other forms of borrowing, showed total investor debt surpassed an unprecedented 60 trillion won at the end of May, which coincided with the transformation of the $4.1 trillion stock market into the world's hottest - and most volatile.

On Thursday, authorities moved to cool the speculative fever, announcing a ban on new listings of leveraged exchange-traded funds tied to individual stocks.

The abrupt intervention comes just two months after regulators initially approved the vehicles.

"The FSS Governor has already admitted these products were approved too hastily, so this is a correction of a known policy error," said Inki Cho, a senior financial market strategist at online trading platform Exness, referring to the Financial Supervisory Service.