Data released by the Korea Exchange (KRX) on Wednesday showed that short selling transactions on the South Korean stock market reached 2.46 trillion won on Tuesday, March 3, the first trading day following airstrikes by the United States and Israel on Iran. This represented an increase of 518 billion won compared to the previous trading day.

On Tuesday, the Korea Composite Stock Price Index (KOSPI) experienced a sharp decline of over 7%, driven by heightened risk aversion in the market due to the deteriorating situation in the Middle East.

The day's short selling volume showed a notable increase when compared to the 2025 daily average of 1.9 trillion won.

Short selling is an investment strategy where an investor borrows securities and sells them, aiming to buy them back later at a lower price to return them. Short sellers profit from a decline in the stock's price.

Analysts suggested that expectations of increased volatility in the South Korean stock market, coupled with a significant depreciation of the South Korean won, may have stimulated demand for short selling. The won had previously fallen to its lowest level since 2009.