Displaying the benchmark Korea Composite Stock Price Index (KOSPI), a screen inside the Hana Bank dealing room in central Seoul is captured on Wednesday. Yonhap
The volume of stock short selling surged by over 500 billion won ($338 million) on the initial trading day following air strikes on Iran by the U.S. and Israel, according to industry figures released Wednesday.
Data from the Korea Exchange (KRX), the primary stock market operator in Korea, revealed that short-selling transactions reached 2.46 trillion won on Tuesday, marking an increase of 518 billion won from the preceding session.
On Tuesday, the benchmark Korea Composite Stock Price Index (KOSPI) experienced a sharp decline exceeding 7 percent, as investor apprehension escalated amidst heightened tensions in the Middle East.
The total value of short-selling activity on that particular day significantly surpassed the daily average of 1.9 trillion won recorded in 2025.
Short selling is a financial tactic where investors borrow securities to sell them, with the intention of repurchasing them at a lower price later to return to the lender. This strategy allows short sellers to profit from a decrease in stock prices.
Analysts suggest that an anticipated rise in volatility within the domestic stock market, coupled with a substantial depreciation of the Korean won — which at one point fell to its lowest value since 2009 — likely fueled the increased demand for short selling.
Lee Kyoung-min, an analyst at Daishin Securities, noted, “The KOSPI had seen a continuous sharp ascent through January and February, reaching a point where a temporary correction was necessary to prevent overheating.”