South Korean stock market sees a "hedging wave": the put/call ratio hits a five-year high, historical data suggests a potential 17% drop.

According to the Zhiguang Financial APP, the number of put options related to the South Korean Kospi 200 Index has sharply increased compared to call options, and is now approaching a key level indicating a market decline. As of the latest closing, the ratio of protective put options to call options has reached nearly 2.5 times, setting a five-year high. This indicator has only touched this threshold a few times before. In July 2007, when the ratio surpassed 2.5, the Kospi 200 Index fell nearly 17% in the following month. After surpassing this level again in January 2021, the index dropped by over 5% in three weeks.