This paper studies the impact of leverage trading on the stock market volatility. In case of the Korean stock market, the adoption of differential margin deposits gives rise to the generation of receivables, which are an implicit leverage, when buying stocks on margin and delaying the settlement payment. In other words, receivables can be considered as short-term leverage trading, which occurs when a customer buys stocks on differential margin and borrows money from a securities firm to settle the payments. This paper takes a close look at how receivables are generated to corroborate that receivables are the resultof leverage trading. Moreover, it provides an empirical analysis of the impact of change in the portion of leverage trading on stock price volatility using a model for stock price volatility that includes change in the share of receivables. According to our findings, the KOSPI market shows that change in the proportion of leverage trading had not affected daily stock index volatility before the introduction of differential margin deposits. However, daily stock index volatility has been impacted by change in the share of leverage trading after the differential margin deposit policy was adopted. One of the findings is that change in total credits including margin trading and receivables also has the same effect. Such findings suggest that leverage trading does not affect the stock market volatility when the portion of leverage in the trading volume is low, but leverage trading impacts volatility in the stock market when the portion of leverage increases, e.g. through the introduction of differential margin deposits. Accordingly, in the event that the share of leverage trading in the trading volumerises, a receivables reduction policy is likely to have meaningful impacts on reducing the stock market volatility.