"Made 200 million won, then lost it all"... Opposition party supreme council member fumes, says "Abolish single-stock leveraged ETFs"

[Financial News] As criticism grows that the introduction of Single-Stock Leveraged ETFs has sharply increased volatility in the domestic stock market, Kim Jae-won, a supreme council member of the People Power Party, publicly cited his own investment losses and strongly criticized the authorities for policy failure. He called for a phased delisting roadmap for the product to curb market disruption.
At a party supreme council meeting held at the National Assembly on the 20th, Kim said, "As the KOSPI market moved upward, I personally held Samsung Electronics shares and booked 200 million won in paper gains, but after the introduction of Single-Stock Leveraged ETFs, I ended up losing all of that profit without doing anything."
He pointed out that the Samsung Electronics and SK hynix Single-Stock Leveraged ETFs, introduced to give investors stuck in FOMO a chance to recover, are instead fueling volatility across the market and accelerating foreign capital outflows.
He also compared the Korea Exchange in Yeouido to "a gambling den worse than Kangwon Land" and sharply criticized Kim Yong-beom, the Chief Presidential Secretary for Policy at the Blue House, saying he bore "responsibility equivalent to opening and abetting a gambling house."
Kim cited the number of sidecar triggers, or temporary suspensions of program-trading quotes, as evidence of the sharp rise in market volatility.
According to his explanation, sidecars were triggered 60 times in total over the 24 years from their introduction in 1996 through 2023, including 26 times during the 2008 financial crisis, averaging only one to two times a year. This year alone, however, they have already been triggered 37 times. Since the listing of Single-Stock Leveraged ETFs in June, the unusual pattern has continued, with 10 triggers in June and 8 in July, based on 12 trading days, amounting to roughly twice every three days.
He said, "As the share of top-cap stocks such as Samsung Electronics and SK hynix in the KOSPI has expanded to 61 percent, adding leveraged products on top of that has made swings in those two stocks send the entire market on a roller coaster." He added that this exposed a structural flaw in which derivatives shake the cash market.
He also dismissed the financial authorities' recent corrective measures as "an ineffective response that completely fails to reflect voices from the field." The authorities had proposed raising the minimum deposit for Single-Stock Leveraged ETF trading from 10 million won to 30 million won and limiting the minimum trading unit to 20 shares.
Kim said, "You cannot solve the problem by leaving foreign investors and institutions, which account for about 60 percent of trading in these products, untouched while restricting only individual investors' access." He stressed that the tracking leverage, currently set at two times, should be lowered, and that a roadmap for the gradual reduction and eventual delisting of Single-Stock Leveraged ETFs must be announced immediately.
[email protected] Moon Young-jin Reporter