The Last Buyers Borrow — What Korea's Record Margin Debt Says About FOMO


On June 22, 2026, Korea's KOSPI closed at 9,114.55, the highest close in its history. Two trading days later, on June 24, the money Korean investors had borrowed from their brokers to buy stocks reached a record of its own: about 38.6 trillion won.

Read those two dates in order. The record in price came first. The record in borrowing came after it.

By July 29 the index had fallen as low as 5,262.77, with circuit breakers halting trading two days in a row. By the end of July the margin balance was down to about 28.9 trillion won. Roughly a quarter of the borrowing was gone in five weeks — some of it repaid by choice, some of it sold out from under the people who owed it. On Friday, October 2, the KOSPI closed at 7,003.74.

I live in Korea, so I watched this one from close up. And the judgment I keep returning to is simple enough to fit on one line: fear of missing out rarely buys the wrong company. It buys the right company, late, with money that belongs to someone else.

Korea's spring of 2026 is the clearest demonstration of that I have seen. It is worth walking through slowly, because the same pattern runs through every market, including the American one.

The Order of Arrival

Every rally has a sequence, and the sequence is mostly about why each buyer shows up.

The early buyers come for a reason they can state — earnings, a product cycle, a price that looked too low. The middle buyers come for evidence: the early buyers turned out to be right, and the rising price is the proof. The last buyers come because they can no longer stand not owning it. They are also the buyers most likely to use borrowed money, because by then the gap between what they have and what they feel they should have is the whole motive.

The Korean margin numbers make that sequence unusually easy to see. By the Korea Financial Investment Association's count, the balance stood at 38.48 trillion won on June 19 — up 499 billion won in a single day, and already a record. It kept climbing to about 38.6 trillion five days later.

What makes those figures striking is what the lenders were doing at the same moment. KB Securities temporarily stopped taking credit-loan buy orders from June 17. Mirae Asset Securities and Meritz Securities raised margin requirements on some stocks on June 19. The brokerages were deliberately making it harder to borrow. The borrowing went to a record anyway. Seoul Economic Daily described the mood that week as a fervor to avoid missing the rally, with analysts noting that the leveraged chase buying was concentrated in large-cap stocks.

When the people lending you the money are tapping the brakes and the balance still sets a high, the market is no longer running on conviction. It is running on the fear of being the one who sat it out.

Why the Feeling Peaks Late



Fear of missing out has a specific shape, and the shape runs in the opposite direction from risk.

Early in a rally, the story is unproven and the price is low. Every day that the price rises removes one more reason to doubt the story. By the end, the price has done all the persuading. So the risk a buyer feels falls steadily, at exactly the same time the price — the thing that actually sets the risk — keeps rising. The late buyer is not careless. The late buyer is responding to the most reassuring evidence the market ever offers, which arrives at the worst possible price.

There is also a social half to it, and it may be the larger half. What a late buyer is usually afraid of missing is not the stock. It is the experience other people are having — the coworker, the cousin, the group chat. A gain someone else made is the most persuasive sentence in investing, because it comes with a face attached.

You may recognize the feeling even if you have never bought a single share on margin. It is the sense that the decision has already been made, by everyone else, and that the only open question is whether you will be included.

The Korean data puts a number on where that feeling did its buying. In August, Kim Jae-seung of Hyundai Motor Securities noted that individual investors' net buying had been concentrated at KOSPI levels between roughly 7,000 and 8,500 — the upper half of the climb, not the lower.

I have made this mistake in my own account. For years I did not listen when family talked to me about crypto, and then I bought in late in the cycle. That is the pattern this post is about, seen from the inside.

The Story Can Be Right and the Trade Still Wrong

Korea's rally had a real story behind it. Demand for AI memory chips lifted Samsung Electronics and SK Hynix, and by May of this year the two companies together made up close to half of the KOSPI — a concentration I wrote about in July, when the index broke.

That matters for how we talk about FOMO. The usual picture is a crowd chasing junk — penny stocks, meme names, something with a ticker and no revenue. Korea's spring did not look like that. The chase was centered on the country's most established companies, businesses with real products and real customers. The story was not a fraud.

And it did not need to be. Nothing in the story behind the rally had to turn out false for the borrowed money to be forced out of it.

This is the part the usual warning gets wrong. It treats fear of missing out as a stock-picking failure, as if the remedy were choosing better companies. Korea in 2026 suggests something narrower and more useful. FOMO is mostly a failure of timing and financing. A story stock is a stock whose price already contains the story. When you buy it late with borrowed money, you pay for the story twice — once in the price, and again in the interest on the loan you used to reach that price.

Borrowed Money Changes Who Decides



When you buy with your own money, a falling price is painful. When you buy with borrowed money, a falling price can end the decision for you.

Margin loans come with a maintenance requirement. If the value of the stock you pledged falls far enough, the broker sells it, at whatever price the market offers that morning, to protect the loan. In Korea this is called bandaemaemae, a forced sale against the borrower, and July produced a great deal of it. Maeil Business Newspaper put the month's forced selling at about 1 trillion won, including more than 100 billion won on each of the two trading days right after the circuit breakers of July 28 and 29.

Think about who that lands on. The early buyer has a cushion; a 30% drop takes back some of a gain. The late buyer on margin has no cushion at all. The same drop can take the position, the gain that was never there, and part of the money that was there before.

That is the real disadvantage of arriving last, and it has very little to do with the entry price itself. The late buyer is the one most likely to be removed from the market before any recovery comes. I wrote earlier this year about the cost of stepping out — how the strongest days tend to sit right next to the worst ones. A forced seller does not get to choose whether to step out. The lender chooses, on the worst day, and the lender's only interest is the loan.

Leverage turns a bad week into a final one. That was true of 100x crypto leverage, and it is true, in a slower and more respectable form, of an ordinary margin account at an ordinary brokerage.

Both Numbers Were Public

In the July post, I wrote that the composition of the KOSPI — two companies at roughly half the index — had been published for months before it hurt.

The same was true of the borrowing. The Korea Financial Investment Association publishes the margin balance every trading day. The record in June was reported within days. Anyone in the country could see that the balance had already set a record on May 29 and was still rising in June, while the brokerages tried to slow it.

Neither number told anyone the date of anything. What the two of them did describe, together, was who would be selling when the date came — and under whose control.

Where This Stops

A record margin balance is not a timing signal. Korea's previous record was set on May 29, and the index kept climbing for another three weeks after that. Anyone who sold on the first record headline would have watched the rally run on without them. The borrowing tells you about the fragility of the crowd, not about the calendar.

And none of this is a view on Korean stocks today. Foreign investors sold a net 20.3 trillion won of KOSPI shares between September 1 and October 2, according to the Korea Exchange, while analysts argue about whether that selling is fading. I have no direction worth publishing, and I would be suspicious of anyone who is very sure of theirs.

Questions for the Next Time It Feels Urgent

Four questions worth having answered before the feeling arrives, because it is much harder to answer them while it is happening.

Can you state the reason in one sentence that doesn't mention other people? "Everyone I know is up" is not a reason to buy. It is a description of the feeling. If the only sentence available is about someone else's gain, that is useful information about the decision.

Whose money is this? Borrowed money is the worst possible fuel for a decision made because other people got rich first. It converts an ordinary mistake into one somebody else gets to close out for you.

Could you hold through half? If the position fell by half, would you still be the one deciding what happens to it? The Sunday Night Test is a quick way to answer that honestly.

What would you do on the worst day? Not the best day — the worst. Every late buyer imagines the gains. Very few rehearse the morning the broker calls. A year down 30% is survivable for most people who planned for it and brutal for almost everyone who did not.

Lines to Watch

Not predictions — the figures that would tell you the crowd's footing has changed.

  • The daily margin loan balance published by the Korea Financial Investment Association. Its direction matters more than any single reading.
  • Investor deposits — cash waiting in brokerage accounts. They peaked near 139 trillion won on June 4 and stood near 104 trillion won by the end of July.
  • Foreign net selling, which reached 20.3 trillion won between September 1 and October 2.
  • Samsung Electronics' preliminary third-quarter results, expected around October 8 — the kind of number that tests a story directly instead of through its price.

The Ones Who Waited Until It Felt Safe

The last buyers in a rally are not foolish people. In most cases they are cautious people. They waited for proof, and the proof kept arriving, day after day, until it finally felt safe to join.

That is the trap. The feeling of safety is the last thing a rally produces, and by the time it arrives, the price has already been paid by someone earlier. Korea's investors borrowed a record amount to buy that feeling in June.

The feeling did not survive July. The loans did.

Data as of October 5, 2026. Sources: Seoul Economic Daily, "KOSPI Tops 9,100 as Retail Margin Debt Hits Record High" (June 23, 2026), citing the Korea Exchange and the Korea Financial Investment Association; Maeil Business Newspaper (August 4, 2026), citing Korea Financial Investment Association data on the June 24 record balance, the July 31 balance, July forced selling, and investor deposits; Seoul Economic Daily, "Foreign Investors Dump 20 Trillion Won in Korean Stocks in a Month" (October 5, 2026), citing the Korea Exchange; Korean market reports on the July 28–29 circuit breakers and the July 29 intraday low (SBS, July 28, 2026; Korean wire reports, July 29, 2026).

Related Posts:

Visuals on this post are AI-generated. The author works with AI as a research and drafting assistant; topics, judgments, and final edits are the author's own. This post is observation, not investment advice. See full Disclaimer for details.

Popular posts from this blog

SK Hynix's ADR Listing — The Split That Isn't a Split

Image
A stock can be expensive in two very different ways. It can be expensive because the business is overvalued — the price has run ahead of what the company is worth. Or it can simply look expensive because a single share is a large object, a big ticket a smaller investor has to swallow whole. Those are not the same problem, and they do not have the same solution. SK Hynix is now handling the second kind in the United States, and the tool it is using looks, at a glance, like a stock split. It is not one. Understanding why is a small lesson in how one country's shares actually get plumbed into another's market. The reframe — the wrapper changed, not the share In Seoul, SK Hynix trades as common stock under the code 000660. According to the company's SEC filing, a single common share was referenced at 2,425,000 won — roughly $1,581 at the filing's exchange rate. That is a large amount to pay for one share, and it is exactly the kind of number that keeps smaller U.S. buyer...
Read more

Is the Petrodollar Dying? The "Iran War" and the Irony of the Dollar Index

Image
The headlines have been loud all year: "The Era of the Petroyuan is Here." As the conflict between the U.S., Israel, and Iran unfolded, Deutsche Bank and other Wall Street institutions warned that the decades-old dominance of the petrodollar was finally fracturing. The story is compelling, and parts of it are true. But the market data from the crisis told a stranger story than the headlines did. This post first ran in late March, at the height of the Iran conflict. Two months later, with a U.S.–Iran ceasefire reportedly in its final stages, the picture has shifted — and the central paradox it described has, if anything, become clearer. So this is an expansion, updated with where the dollar actually stands as of late May. The Petroyuan Reality Check It is true that sanctioned nations — Russia, Iran, Venezuela — have increasingly turned to the Chinese yuan (CNY) or the UAE dirham (AED) to bypass U.S. sanctions. Saudi Arabia has experimented with China's cross-border dig...
Read more

How to Protect Your Wealth in 2026: The Hidden Trap of Inflation

Image
You may have done everything right. Saved diligently. Lived below your means. Kept money in the bank where it felt safe. And still, the house you could have bought ten years ago has quietly moved out of reach. That is not a failure of effort. It is the hidden trap of inflation — and in 2026, the trap is open wider than it has been in years. This post first ran in March. Two months of data have since made its central point harder to argue with, not easier. So this is an expansion, updated with the numbers that have arrived since — including an inflation reading that surprised to the upside as recently as late May. Is Your Money Quietly Losing Ground? The honest framing is not dramatic. It is arithmetic. A dollar held as cash earns whatever your savings account pays. If inflation runs faster than that yield, the real value of the dollar shrinks even while the number in your account stays the same or grows slowly. During the post-COVID era of zero interest rates, this was easy to se...
Read more