The CEO of Kiwoom Securities likened Toss Securities’ investor forum to a stock-pumping chatroom, spotlighting growing concerns over risky herd behavior by South Korean retail investors in global markets.
At Kiwoom Securities’ annual shareholders meeting on Mar. 26, CEO Eom Ju-sung sparked a stir in Seoul’s financial district when he remarked that “Toss Securities’ community is being viewed as a space where people try to hype up stocks, like in pump-and-dump schemes.”
Eom made the comment in response to shareholder concerns that newer platforms like Toss Securities are eating into their market share. Some participants urged Kiwoom to activate its own investor community features to attract more users.
The remark drew attention not only because a major industry figure directly called out a rising competitor, but also because it shed light on growing concerns over herd behavior among retail investors—especially those trading in overseas markets.
In recent months, S. Korean investors have driven extreme price swings in high-risk overseas ETFs, such as leveraged and inverse funds, and even in small-cap U.S. stocks with minimal market capitalization.
This kind of herd behavior has already begun to distort trading patterns in global markets.Stock discussion boards on web portals and trading apps have become hotbeds of this trend. Once a few users hype up a stock, others often jump in without due diligence, leading the stock to dominate trading volume rankings.
Toss Securities’ community feature, mentioned during the Kiwoom meeting, has become one of the most popular forums of its kind.
In November alone, users traded more than 30 trillion won (about $20.4 billion) worth of overseas stocks through Toss Securities. Lee, a 38-year-old office worker who uses the platform to invest in U.S. equities, said, “Sometimes I just browse the posts at night for fun. I’ve made some pocket money buying hot stocks and selling quickly, but I’m still stuck holding a few.”
While Korean investors can only acquire a small share of megacap U.S. companies like Tesla or Nvidia—typically no more than 2% of market cap—their presence is much larger in niche, high-risk products.
According to the Korea Securities Depository, S. Koreans held 40.5% of the global market cap of the Tesla 2x leveraged ETF (TSLL) as of Mar. 18. They also accounted for 11.9% of the TQQQ, which aims to triple the daily returns of the Nasdaq-100, and 22.2% of the SOXL, a 3x leveraged ETF linked to the NYSE Semiconductor Index. In these high-volatility instruments, S. Korean retail investors—often referred to as “K-ants”—are major players.
Some small-cap stocks have also seen wild swings after catching the attention of S. Korean traders. YesAsia Holdings, a cosmetics distributor listed in Hong Kong, surged from about 1 Hong Kong dollar in May 2023 to 7 dollars by September, before falling back to the 3-dollar range.
Over the past year, S. Korean investors bought more of this stock than any others on the Hong Kong exchange, apart from BYD, Xiaomi and Alibaba. “You can clearly see the same speculative pattern from the domestic market—traders rushing in, pushing the price up, then early movers cashing out,” one analyst said.
The trading behavior of S. Korean retail investors is drawing attention even in the United States. Owen Lamont, senior vice president at asset management firm Acadian, recently published a note titled “The Squid Game Stock Market,” arguing that Korean investors are fueling volatility in U.S. markets.
Although their holdings amount to just 0.2% of total U.S. market capitalization, Lamont noted that they wield outsized influence in certain corners of the market. “The U.S. stock market is becoming Koreanized,” he wrote.
