Can credit rise while its ratio falls? Reading margin balances and investor deposits

1. A higher balance is different from that much new buying

Margin credit finances share purchases through borrowing from a securities company. Its outstanding balance measures the lending still outstanding on the observation date. This site uses KOFIA's reported total and shows the KOSPI and KOSDAQ breakdowns on the detail screen. A KRW 1 trillion increase means outstanding credit rose by that amount between two dates; it does not mean gross new lending or net stock buying was exactly KRW 1 trillion. New loans and repayments can occur together.

Investor deposits are securities-transaction-related funds reported in KOFIA's statistics. Calling them 'waiting buying power' simplifies their possible use. An account balance does not tell us when or which stocks its owner plans to buy, and an increase does not establish that all of the change came from new external funding.

Read the two series together to compare different balances over a common period. How much did credit change, and how much did deposits change? Those questions are more informative than an isolated record-high headline. The aggregates combine different investors and accounts, however, so do not net them as if they were one person's assets and liabilities.

Sources: KOFIA — Credit balances over time · KOFIA — Stock-market funds and investor deposits

2. Worked example: credit grows 5% while the ratio falls from 40% to 35%

Between the same two observation dates, suppose margin credit rises from KRW 20 trillion to 21 trillion and investor deposits rise from KRW 50 trillion to 60 trillion. Credit grows 5%; deposits grow 20%. Credit divided by deposits falls from 20 ÷ 50 = 40% to 21 ÷ 60 = 35%. That is a decline of 5 percentage points, not a 5% decline in credit.

Isolate the denominator to see why. Had deposits stayed at KRW 50 trillion, credit of KRW 21 trillion would have produced a 42% ratio. In this example deposits also grew, producing 35% instead. The precise description is: 'Credit increased, but deposits grew faster, lowering the ratio between the two totals.'

It does not follow that market leverage became safe. We do not know whether the accounts accumulating deposits are the same accounts carrying large credit balances. The 35% reading compares two aggregates. It cannot calculate an account's distance from a collateral shortfall or the amount of future forced selling.

Credit growth = (21 ÷ 20 − 1) × 100 = +5% Deposit growth = (60 ÷ 50 − 1) × 100 = +20% Credit/deposits = 20 ÷ 50 × 100 = 40% → 21 ÷ 60 × 100 = 35% Ratio change = −5 percentage points

3. What combinations of rising and falling balances establish

If credit and deposits both rise, both reported balances grew. Comparing growth rates also explains the direction of the ratio. This alone does not classify the market as a healthy rally or an overheated one. The distribution of balances and borrowers' collateral positions remain hidden behind the totals.

A declining credit balance can have multiple causes. Voluntary cash repayments, repayments after selling holdings and collateral-related disposals may contribute. Treating the full daily decline as forced selling overstates what the balance measures. A claim about forced-sale amounts requires data that identify those transactions separately.

Likewise, avoid assigning an immediate intention—waiting to buy or leaving the market—to a sharp deposit change. Settlement, deposits and withdrawals, and other movements still need investigation. Look across surrounding observations to determine whether the change was temporary. If no evidence establishes the cause, record it as unverified.

4. Connect credit, deposits and market prices over one period

Identify a recent and an earlier observation in total margin credit. Unlike the cumulative foreign-flow chart, the credit chart displays each date's outstanding balance directly; 1 tn KRW means one trillion won. Find exactly the same two dates in investor deposits and keep this common-date rule consistent for weekly records. If the latest dates differ, do not divide today's credit by older deposits and label the result today's ratio.

Calculate each balance's amount change and percentage growth before calculating credit divided by deposits. Starting with the ratio can hide a rising numerator behind a faster-rising denominator. Enter amounts in the same unit into the calculator and record ratio changes in percentage points.

Then add the KOSPI and KOSDAQ price changes and breadth for that period. Falling prices alongside rising credit identify a combination worth investigating: borrowing balances expanded while shares weakened. Market totals still cannot substitute for stock-specific credit information or your own collateral position. Those require separate checks.

5. Three traps: units, coverage and account-level risk

First, align units. Mixing amounts quoted in KRW 100 million with amounts in KRW trillion creates a factor-of-10,000 error. Convert both inputs to the same unit before dividing. Rounded screen values may give slightly different results from unrounded source data; preserve the precision of the values used in your note.

Second, align coverage. KOSPI-only margin credit differs from the combined KOSPI and KOSDAQ total. Check market scope and statistical definitions when changing periods or comparing sources. A ratio above or below a past level does not by itself establish a universal safety or danger threshold.

Third, distinguish account risk. Growth in market-wide deposits cannot cover a shortfall in your own account. If you use margin credit, check your broker's actual maintenance conditions, deadlines for adding collateral, loan maturity, interest rate and available repayment cash. These terms cannot be inferred from the market credit-to-deposit ratio.

6. Keep a weekly record of balances, the ratio and unverified causes

Use this format: 'Common dates __ to __ / credit __ to __ trillion (__%) / deposits __ to __ trillion (__%) / ratio __ to __% (__ percentage points) / KOSPI and KOSDAQ changes over the same period __ / evidence for the explanation __.' This puts your actual calculations in one place rather than copying a headline.

For the fictional case, write: 'Credit 20→21 trillion; deposits 50→60 trillion. The ratio fell from 40% to 35%, but absolute credit increased. These data do not establish the source of deposit growth or borrowers' collateral positions.' This avoids selecting only the rising credit balance or only the falling ratio to tell the story.

At the next observation, check whether the change continued, reversed or reflected a different data date. The result is a record that separates an exaggerated market narrative from the items you actually need to verify in your own account, rather than a prediction of a market top or bottom.