As the KOSPI continues its upward rally, funds betting on stock declines through short selling are rapidly increasing. The balance of stock lending transactions has surpassed 180 trillion won for the first time, indicating an unusual trend where short selling expands even amid a rising market.
According to the Korea Financial Investment Association and the Korea Exchange, as of May 7, the balance of stock lending transactions reached 179.67 trillion won, and on May 6, it was recorded at 180.63 trillion won, marking the first time it exceeded 180 trillion won. Samsung Electronics and SK Hynix topped the list of the top 10 stocks with the highest lending balances, at 21.71 trillion won and 21.66 trillion won, respectively. The lending balance refers to the amount of stocks borrowed by investors for short selling or hedging that has not yet been repaid. It is typically interpreted as an indicator of funds waiting for short selling.
Additionally, major stocks with significant short selling positions include Hyundai Motor, HD Hyundai Heavy Industries, and Hanmi Semiconductor. Hyundai Motor's short selling balance is approximately 1.68 trillion won, while HD Hyundai Heavy Industries has seen its balance nearly double to about 1.38 trillion won compared to the previous month. Hanmi Semiconductor also has a short selling balance of about 1.33 trillion won, making it a notable stock for short selling bets.
The short selling balance represents the amount of actual short positions that have not yet been closed. While the lending balance indicates potential future short selling, the short selling balance reflects the actual bets against stock prices.
Retail investors are also continuing to bet on declines using inverse exchange-traded funds (ETFs), which profit when the index falls. According to the exchange, the KODEX 200 Futures Inverse 2X ETF saw a net purchase of about 529.9 billion won by individual investors over the past month, placing it among the top ETFs for net purchases.
The trading volume is also substantial. The recent monthly average trading value of the KODEX 200 Futures Inverse 2X ETF is approximately 5.06 trillion won, with a single-day trading volume of about 546 billion won on May 8. The trading volume has exceeded 4.2 billion shares, establishing it as a leading short-term trading stock in the domestic ETF market.
However, as the KOSPI continues to rise, actual returns from these investments have been disappointing. The recent one-month return for the KODEX 200 Futures Inverse 2X ETF is around -43%, and over three months, it has shown a decline exceeding 66%. This reflects the inverse structure of the ETF, which moves in the opposite direction of the KOSPI's rise.
Market analysts note that despite the ongoing rally, trading in inverse ETFs remains steady. This suggests a coexistence of investor demand for both expectations of index increases and preparations for potential short-term corrections, leading to a divergence between the spot market and the derivatives and ETF markets.
* This article has been translated by AI.
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