A post on Blind, an anonymous community app for office workers [Online community]
A post on Blind, an anonymous community app for office workers [Online community]

The story of an investor who built a 3.5 billion won ($2.6 million) portfolio through stock trading only to see it collapse to 200 million won after turning to leveraged bets has gone viral online, drawing a wave of warnings about the dangers of leverage investing.

On Saturday, a user identified as a current Samsung Electronics employee posted about their investment experience on Blind, an anonymous community app popular among office workers. The post has since spread widely across social media and online forums.

The author, identified only as A, said they had concentrated 500 million won in memory chip shares in December last year and grown the portfolio to 3.5 billion won by June this year. At the time, A considered selling everything and stepping away from trading for two years, but decided to stay invested, believing share prices would climb further given their experience in the semiconductor industry.

Greed to break even, then leverage — only 200 million won left after October crash

A post on Blind, an anonymous community app for office workers [Online community]
A post on Blind, an anonymous community app for office workers [Online community]

Leveraged trading proved to be A's undoing. Having previously stuck to spot positions, A began using leverage on SK hynix shares in early May. "Up until then I had only held spot positions, but I was blinded by the feeling of falling behind my peers because of how bonuses were being divided at work, and that's when I touched leverage," A wrote.

The leveraged positions amplified gains for a time, but a sharp drop in share prices quickly eroded the portfolio. "A massive crash came in July, and I barely held on, keeping it at around 750 million won," A said. Attempts to recover the losses by increasing leverage again only deepened the damage.

"Driven by the desire to get back to even, I piled on more leverage, then the October crash hit — I liquidated everything just before a forced margin call and was left with a measly 200 million won," A wrote. "The future I had been picturing has all vanished, and I feel so depressed I could die. Now all I have is 200 million won in capital, and I don't know what to do in such an unstable market."

A added that the dream of achieving financial freedom through stocks — to raise a family without want — now felt out of reach. "I don't think I'll be able to invest aggressively anymore," A wrote, and went on to say: "They say the three things that ruin passionate, smart young people are alcohol, women and gambling — what I did this time was gambling."

Reactions online were mixed. Some users shared similar experiences: "This doesn't feel like someone else's story. When your returns are soaring, the world looks easy — and that's exactly when you snap," one wrote, while another said their own portfolio had fallen from 90 million won to 1.4 million won. Others expressed sympathy tinged with frustration. "It seems like a sense of deprivation drove the disaster," one commenter wrote. "If you hit 3.5 billion won and just set up dividend stocks, you could live off that for life — why on earth did it come to this?"

Kospi slides toward 5,500 — forced liquidations near 300 billion won over 7 trading days

The risks facing debt-fueled investors have grown sharply amid the recent plunge in domestic markets. As the Kospi fell toward the 5,500 level, forced liquidations over the past seven trading days approached 300 billion won.

According to the Korea Financial Investment Association, forced selling tied to unpaid margin balances totaled 298.1 billion won ($221 million) over the seven trading days from Oct. 6 through Thursday. Forced selling occurs when a brokerage liquidates a client's shares after the client fails to settle the purchase price by the payment deadline.

Leveraged investing allows traders to take on larger positions with less of their own capital, but losses mount just as quickly when markets move against them. Attempting to recover losses by scaling up positions further can accelerate the erosion of assets or trigger forced liquidation.

Industry experts are warning against the dangers of leverage, cautioning that taking on two- or three-times leveraged products — or buying on borrowed money — during periods of extreme index volatility significantly raises the risk of severe losses.


bbo@heraldcorp.com