Short selling has fully resumed, and it is estimated that short selling investors made an average profit of about 5% over the past week. With the resumption of short selling and the coincidental impact of the universal and mutual tariff shock from the Donald Trump administration, those betting on a decline in share prices have seen considerable performance.
According to the Korea Exchange on the 8th, from the 31st of last month, when short selling resumed, until the day before, 236 stocks in the KOSPI and KOSDAQ markets had short selling transactions accounting for more than 10% of total transactions. Comparing the average short selling price of these stocks (transaction amount ÷ transaction volume) to the previous day's closing price, the average short selling price of 226 stocks (95.8%) was 5.65% higher.
Short selling investors can be seen as having made a profit equivalent to the amount the stock price fell below the average short selling price since they sell borrowed stocks and then buy them back to repay. Even considering the annual stock borrowing fee, which ranges from 0.01% to 4%, it indicates that short selling investors are in a position of unrealized gains.
The stock with the highest profit margin for short selling investors was recorded as ISU PETASYS. The previous day's closing price for ISU PETASYS was 28,650 won, which was about 17% lower than the average short selling price of 33,510 won. Despite the stock slightly rising by about 6% in the morning after ISU PETASYS confirmed the issuance price of new shares for its shareholder allocation capital increase, it is still estimated that the majority of short selling investors are in a profit position.
Doosan, SK Square, YC, HANA Micron, and Doosan Robotics also had previous closing prices more than 12% lower than the average short selling purchase price.
However, not all concentrated investments in short selling are yielding results. In the case of KRAFTON, the previous day's closing price was 362,000 won, which was 3.7% higher than the average short selling purchase price of 349,200 won. It is estimated that short selling investors are thus facing valuation losses.
KRAFTON publicly released the early access version of the life simulation game "inZOI" on the 28th of last month, which became popular on "Steam", the world's largest PC gaming platform, resulting in a rebound in its stock price.
Lotte Shopping, Emart, and GS Retail also have previous closing prices higher than the average short selling purchase prices. They are representative domestic stocks. Amid the sluggish stock market due to the tariff war of the Trump administration, they have drawn attention as defensive stocks, maintaining relatively good performance. There are also forecasts that policies to stimulate domestic demand, such as the preparation of a supplementary budget, will support their stock prices during the early presidential election phase.
Hanwha Solutions and GKL, a foreign casino tourism beneficiary, also made the list of stocks where short selling investors recorded average valuation losses, expecting rebound benefits from the U.S. restrictions on Chinese solar modules.
Meanwhile, as the stock market experienced a significant decline, the enthusiasm for short selling seems to have cooled down. With the KOSPI and KOSDAQ indices showing weakness, short selling trading volume that had exceeded 1 trillion won dropped to 877 billion won the day before. Stocks designated as overheating short selling are continuously seeing their trading suspended for a day, and it seems many investors believe the market will become more difficult to fall further.
Some analysts suggest that foreign investors, who are major players in short selling, are withdrawing from the Korean stock market, also reducing hedging-related short selling.