Securities Firms' CFD Trading Balance 2.7697 Trillion Won... Kyobo and Kiwoom Lead

Transaction Balance Highest in Kyobo, Kiwoom, Samsung
Trading Volume Exceeds 4 Trillion Won Since Early Year

The outstanding balance of Contracts for Difference (CFD) transactions, identified as the cause of the stock price crash triggered by Soci?t? G?n?rale (SG) securities, has been confirmed to approach 2.8 trillion KRW. Kyobo Securities and Kiwoom Securities accounted for overwhelmingly high amounts. The transaction volume for January to February this year exceeded 4 trillion KRW.

According to data submitted by the Financial Supervisory Service to the office of National Assembly member Lee Yong-woo of the Political Affairs Committee on the 10th, as of the end of March, the outstanding CFD transaction balance of 13 securities firms was 2.7697 trillion KRW, an increase of 444.3 billion KRW from the end of last year (2.3254 trillion KRW).

CFD is an over-the-counter derivative transaction where trading is conducted for the purpose of arbitrage by utilizing price fluctuations of underlying assets without holding the actual investment products, and the difference is settled. Trading is possible with partial margin deposits, allowing the use of high leverage. In particular, since actual stocks are not held, transactions are conducted anonymously, and capital gains tax is relatively low, raising concerns that CFDs could be exploited for stock price manipulation.

The trend of outstanding balances was 1.2713 trillion KRW at the end of 2019, 4.7807 trillion KRW at the end of 2020, 5.405 trillion KRW at the end of 2021, and 2.3254 trillion KRW in 2022.

As of the end of March this year, the securities firm with the largest CFD outstanding balance was Kyobo Securities with 618 billion KRW. This was followed by Kiwoom Securities (557.6 billion KRW), Samsung Securities (350.3 billion KRW), Meritz Securities (344.6 billion KRW), and Hana Securities (340 billion KRW). Eugene Investment & Securities (148.5 billion KRW), DB Financial Investment (140 billion KRW), and Korea Investment & Securities (112.6 billion KRW) also had CFD outstanding balances exceeding 100 billion KRW.

The trend of CFD transaction volumes was 8.3754 trillion KRW in 2019, 30.9033 trillion KRW in 2020, 70.0702 trillion KRW in 2021, and 25.9437 trillion KRW in 2022. The transaction volume for January to February this year reached a total of 4.066 trillion KRW.