What it is
A short seller borrows shares, sells them, and later buys them back — ideally cheaper — to return them. Korea allows only covered (borrowed) short selling; naked short selling is illegal.
Rules in Korea
Korea banned short selling across the market from November 2023 and, after building a monitoring system for illegal shorting, resumed it for all stocks on March 31, 2025. Retail investors can short through broker stock-lending services.
What to keep in mind
A high short balance means many bets on a decline. When prices rise, short sellers buying back to cut losses (short covering) can push prices higher still.
Where to check
The Korea Exchange publishes short-selling balances by stock, and companies disclose when the balance passes set thresholds. A rising balance means more bets against the price, but it also comes from arbitrage tied to convertible bonds and stock lending, so it is not a direction signal by itself.
This explanation is general information, not investment advice. Rules reflect September 2026 and may change; check official exchange and broker notices.