Stock Crash Wipes Out Leveraged Bets in Korea, Sowing Panic

As South Korean stocks crashed Wednesday afternoon, panic spread through Seoul’s financial district. At the small downtown office of Mirae Asset Securities, scores of clients hurriedly lined up to get their money out.

Some in the crowd had snapped up stocks on leverage — part of the mania that had turned the market into a national pastime and made the Kospi the world’s top-performing benchmark — and they were now desperate to unload them as the war in Iran rocked the global economy. They gestured and shouted to get the attention of Mirae employees who could help them sell the positions they couldn’t unwind online. As they waited for help, their phones flashed ever-growing losses — the Kospi was down 8%, then 10%, then 12% — added to their angst.