📌 1.2 million retail investors wiped out by margin calls! The heart-wrenching lesson from Korean retail investors—A-share investors should also take a look
🍖 Chopper says:
The first reaction to this news is to quickly check whether your own positions carry similar risks. Korea’s latest wave in which 1.2 million retail investors got liquidated shows that leveraged capital can be extremely destructive in highly volatile markets. Recently, China’s A-share market has also been actively trading a number of low-priced stocks and theme stocks, but whatever you do, don’t learn from Korean retail investors by taking on too much leverage.
Specifically for A-shares, I’m more focused on index-related ETFs such as $SSE Composite Index(000001.SH) and $STAR 50(000688.SH). When leveraged capital is liquidated, it often spreads from individual stocks to more liquid, high-quality targets first. If I were to take action, I’d actually look at something like $China Merchants Bank(600036), a bank stock. That’s because its valuation is low and its dividends are steady—when the market falls, it tends to hold up better. The logic is completely different from the “junk” stocks being hyped up in Korea.
Risk warning: Although this Korea news is scary, A-shares still have trading limits (price up/down limits) and market regulation. Don’t just copy panic and liquidate immediately. By comparison, many of the stocks Korean retail investors were wiped out in involve virtual cryptocurrencies and leveraged ETFs. Meanwhile, China’s A-share market is cracking down hard on illegal leverage. Even though names like $CATL(300750) (a new-energy leader) can be volatile, their fundamentals are far more solid than the stocks that were liquidated on the Korean side.
#000001 #000688 #600036 #300750 #A股
🍖 Chopper says:
The first reaction to this news is to quickly check whether your own positions carry similar risks. Korea’s latest wave in which 1.2 million retail investors got liquidated shows that leveraged capital can be extremely destructive in highly volatile markets. Recently, China’s A-share market has also been actively trading a number of low-priced stocks and theme stocks, but whatever you do, don’t learn from Korean retail investors by taking on too much leverage.
Specifically for A-shares, I’m more focused on index-related ETFs such as $SSE Composite Index(000001.SH) and $STAR 50(000688.SH). When leveraged capital is liquidated, it often spreads from individual stocks to more liquid, high-quality targets first. If I were to take action, I’d actually look at something like $China Merchants Bank(600036), a bank stock. That’s because its valuation is low and its dividends are steady—when the market falls, it tends to hold up better. The logic is completely different from the “junk” stocks being hyped up in Korea.
Risk warning: Although this Korea news is scary, A-shares still have trading limits (price up/down limits) and market regulation. Don’t just copy panic and liquidate immediately. By comparison, many of the stocks Korean retail investors were wiped out in involve virtual cryptocurrencies and leveraged ETFs. Meanwhile, China’s A-share market is cracking down hard on illegal leverage. Even though names like $CATL(300750) (a new-energy leader) can be volatile, their fundamentals are far more solid than the stocks that were liquidated on the Korean side.
#000001 #000688 #600036 #300750 #A股