[2021 National Audit] Derivatives Investment by Under 20s Soars 1760% in 3 Years... "Beware of High-Risk Products"

[Asia Economy Reporter Ji-hwan Park] It has been revealed that trading of highly volatile derivatives has recently shown a rapid increase. In particular, there has been a nearly 1800% increase in trading among those aged 20 and under over the past three years, highlighting the need for caution regarding high-risk products.

According to the status of domestic investors' domestic and overseas derivatives investments submitted by the Financial Supervisory Service to Kim Byung-wook, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, investment in the domestic derivatives market by those aged 20 and under increased by 1760% last year compared to 2017.

Derivatives are classified as ultra-high-risk products due to their high volatility and unpredictability. Therefore, individual investors trading in the domestic derivatives market are required to undergo prior education and simulated trading, and a basic deposit system is also in place.

Individual investment in the domestic derivatives market has shown an increasing trend: 2,468 trillion won in 2017, 2,886 trillion won in 2018, 2,511 trillion won in 2019, and 4,126 trillion won last year. In the first half of this year alone, 2,143 trillion won was traded, already surpassing half of last year's level.

Notably, the increase in individual investment among those in their 20s, including those aged 20 and under, was remarkable. Trading by individual investors aged 20 and under, which was only about 58.3 billion won in 2017, surged to 1.083 trillion won in 2020, marking a 1760% increase in three years. In the first half of this year alone, 792 billion won was traded, exceeding 70% of last year's trading volume. Investment by those aged 21 to 30 also showed a rapid increase of 226% during the same period.

On the other hand, investment by institutions and corporations investing in domestic derivatives increased by only 26% last year compared to 2017.

Assemblyman Kim Byung-wook stated, "It appears that the abundant liquidity in the market due to COVID-19 last year expanded into the domestic and overseas derivatives markets along with the stock market. Especially in the domestic derivatives market, since the investment growth rate among those aged 20 and under is remarkable, investor education on understanding ultra-high-risk products and risk management should be well implemented."

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