Wild Swings After 1,000% Rally Show Day-Trader Danger in Korea
- EV shares have resumed rise after an unusual drop last week
- Margin debt in Kosdaq index has surpassed that of Kospi gauge
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It was a moment of triumph for South Korea’s retail investors, when a jump in Ecopro Co. to a record high showcased the influence that they wield over the stock market. But the surge was gone in less than 60 minutes.
The breathtaking rally and sharp reversal in the battery material maker on July 26 serve as a cautionary tale on the power of day traders, who are a dominant force in South Korea’s equity market. Their bets on EV-related shares triggered wild swings that catapulted the Kosdaq 150 index to a five-year high last week before a sudden crash halted the rise.