Margin Calls, Leveraged ETFs Trigger South Korean Market Crash

South Korea’s stock market, called the KOSPI, had been going up a lot because of new computer chips that help artificial intelligence.

Some people borrowed money to buy big shares of two chip companies, Samsung and SK Hynix.

When the share prices fell, the banks asked them to put more money in.

Many could not, so the banks sold their shares, making the prices fall even more.

This caused a big crash.

The government said sorry because they had let the risky products be sold without checking them well.

The crash shows that borrowing money to invest can be very risky, especially when the market turns down quickly.