Last Year's Short Selling Trading Volume 103 Trillion KRW... Foreigners and Institutions Account for 99%

[Image source=Yonhap News]

[Asia Economy Reporter Koh Hyung-kwang] It has been revealed that the short selling transaction amount in the domestic stock market exceeded 100 trillion won again last year. The proportion of short selling transactions in the entire stock market reached 4.52%. Although the short selling transaction amount decreased by nearly 20% compared to the previous year due to the sluggish stock market, its share in the stock market did not fall behind.

According to the Korea Exchange on the 13th, the total short selling transaction amount traded on the KOSPI and KOSDAQ last year was 103.49 trillion won. This corresponds to 4.52% of the total stock transaction amount of 2,287 trillion won last year. Compared to 2018, when the short selling transaction amount was at its highest at 128 trillion won, it decreased by about 25 trillion won (19.5%), but the transaction proportion was similar to 2018 (4.57%).

Short selling is an investment technique where investors borrow stocks and sell them expecting the stock price to fall, then repurchase the stocks at a lower price to return them, thereby earning a price difference profit.

In 2009, the proportion of short selling in the total transaction amount was less than 1%. However, after entering the 1% range in 2010, it increased annually, surpassing 2% in 2012, 3% in 2014, and 4% in 2016. In particular, in 2018, when it rose to 4.57%, stocks worth 128 trillion won were traded through short selling, marking the first time the 'short selling 100 trillion won' barrier was broken in a year.

Last year, due to the sluggish stock market, the short selling transaction amount was around 103 trillion won, less than the previous year, but its share in the stock market was similar to the record high in 2018.

The proportion of short selling was higher in the KOSPI than in the KOSDAQ. The short selling amount traded on the KOSPI was 78.23 trillion won, accounting for 6.37% of the total transaction amount (1,227 trillion won). On the other hand, in the KOSDAQ, short selling transactions accounted for 2.38%, or 25.26 trillion won, out of the total transaction amount of 1,060 trillion won.

The main investors using short selling are foreign and institutional investors. Last year, foreign investors accounted for 62.77% (64.9621 trillion won) of the total short selling transaction amount, and institutions accounted for 36.09% (37.3468 trillion won). Combined, foreign and institutional investors accounted for 98.86%, meaning that almost all short selling transactions are conducted by these two major players. Individual short selling accounted for only 1.14% (1.1761 trillion won).

However, compared to 2018 (66.95%), the proportion of short selling by foreign investors decreased by 4.18 percentage points, while institutions increased from 32.18% to 36.09%, up by 3.91 percentage points. Individual investors also saw a slight increase from 0.85%.

This content was produced with the assistance of AI translation services.