An increasing number of individual investors are putting money on a ‘decline’ in the stock market. As the KOSPI index rises close to 7,000, concern...
On the 27th of last month, when the market capitalization of the domestic stock market surpassed 6, 000 trillion won for the first time, related indices are displayed at the Hana Bank dealing room in Jung-gu, Seoul. 2026.4.27 Kwon Do-Hyun An increasing number of individual investors are putting money on a ‘decline’ in the stock market.
As the KOSPI index rises close to 7,000, concerns about overheating have grown. Attention is focused on whether, true to the market adage to sell in May and go away, the market will slip into a weak phase in May. According to the Korea Exchange on the 1st, the KOSPI closed the previous session down 1.38% at 6,598.87.
After renewing record highs for three consecutive days, it paused for breath. Since closing above the 6,000 mark for the first time on February 25, the KOSPI has, in just two months, risen to the point of eyeing 7,000. At the same time, market pressures have increased.
Concerns have grown that, with the index excessively overheated, a correction or decline could begin at any moment. The KOSPI 200 Volatility Index , known as the ‘Korean fear index’, has begun to rebound. On March 4, when the U.S.-Iran war entered full swing, the VKOSPI jumped to 80.37.
As Middle East risks eased somewhat, it fell to 48.51 on the 17th of last month, but has since climbed steadily, hitting a high of 56.0 on the 29th and closing at 54.34 on the 30th. Accordingly, more retail investors are betting on a fall in the KOSPI.
The exchange-traded fund most heavily bought by individuals last month was ‘KODEX 200 Futures Inverse 2X’, with net purchases of 645.4 billion won. By contrast, over the same period, the ETFs most net-bought by foreigners and institutions were ‘TIGER MSCI Korea TR’ and ‘KODEX Leverage’ , respectively.
Given the strong uptrend, premature downside bets have at times incurred heavy losses. As the KOSPI rose 30.61% last month, the return on KODEX 200 Futures Inverse 2X came to -47.35%. Some inverse products have even faced delisting.
An ETN from Samsung Securities, ‘Samsung Inverse 2X KOSPI 200 Futures ETN’, triggered an early redemption event on the 29th when its intraday indicative value fell below 1,000 won at the close. Under exchange rules, if, due to underlying asset price movements, the IIV at the close falls below 1,000 won, early delisting may be carried out.
As the seasonally weak month of May arrives, attention is turning to whether the adage ‘Sell in May ’ will hold. Byun Jun-Ho, an analyst at IBK Investment & Securities, analyzed, “If the KOSPI comes close to 7,000 points, the desire to realize short-term profits in early May is expected to strengthen further,” adding, “Sell in May is a statistically non-negligible pattern.
” The phenomenon of KOSPI gains slowing from May to autumn occurs because, unlike at the start of the year, funds do not flow in, and price burdens increase after rallies at the end and beginning of the year. A weakening of expectations for second-half earnings also plays a role.
However, Byun noted, “It is necessary to consider that the market soared 30% this April,” adding, “In years when the KOSPI index surged more than 5% in April, there has never been a case of a decline in May. ” He said, “While it is necessary to leave room for a short-term adjustment due to technical pressures, there is no need to be overly concerned about the negative impact of ‘Sell in May’ this year. ” 한글기사 원본
Retail Investors Take ‘Downside Bets’ As The KOSP 000
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