On the First Day of Leverage Regulation, Trading Value Plunges to the 300 Billion Won Range, About One-Quarter of the Peak

[Financial News] Trading slowed sharply on the first day that regulations on investment in single-stock leveraged exchange-traded funds (ETF) took effect. Trading value for 16 single-stock ETFs based on Samsung Electronics and SK hynix fell to around 300 billion won.
According to the Korea Exchange on the 31st, trading value for the 16 Samsung Electronics and SK hynix single-stock ETFs came to about 307.2 billion won. That was about 23.6% of the 1.30488 trillion won recorded on the 15th, marking a 76.5% drop from the peak. It was also only about one-quarter of the previous day's roughly 1.24 trillion won.
Starting that day, the financial authorities raised the base deposit for new investors in single-stock leveraged ETFs from 10 million won to 30 million won. The move was designed to curb excessive speculative trading and ease market volatility.
Semiconductor stocks surged across the board that day, sending leveraged ETFs sharply higher as well. As SK hynix hit its upper price limit, MiraeAsset TIGER SK Hynix Single Stock Leverage ETF rose 59.81%, while KODEX SK Hynix Single Stock Leverage ETF gained 58.04%. Samsung Electronics single-stock leveraged ETFs also posted gains of more than 50%. By contrast, SOL SK hynix Futures Single Stock Inverse 2X, which bets on declines, fell nearly 60% after hitting its lower price limit.
Trading value for the flagship KODEX SK Hynix Single Stock Leverage ETF was about 120 billion won, only one-third of the previous day's 360 billion won. SOL SK hynix Futures Single Stock Inverse 2X, which traded more than 500 billion won the day before, also fell to the 50 billion won range.
Trading volume also dropped sharply. KODEX SK Hynix Single Stock Leverage ETF fell from about 490 million shares the previous day to around 110 million shares, while SOL SK hynix Futures Single Stock Inverse 2X shrank from the 270 million-share range to around 60 million shares.
As semiconductor stocks surged, individual investors appeared to be taking profits rather than buying. KODEX SK Hynix Single Stock Leverage ETF ranked first in net selling by individual investors, and KODEX Samsung Electronics Single-Stock Leveraged ETF and MiraeAsset TIGER SK Hynix Single Stock Leverage ETF also ranked among the top net-sold products.
However, many said it remains necessary to determine whether the decline in trading was the result of the regulation or simply a temporary shift in market conditions. Im Jeong-eun, a researcher at KB Securities, analyzed that "the domestic stock market showed a strong technical rebound as improving U.S. Artificial Intelligence (AI) investment sentiment, expectations for continued semiconductor investment, and easing concerns about deleveraging all came together." She added that "with major earnings releases from companies such as Palantir Technologies and Advanced Micro Devices, Inc. (AMD), as well as the U.S. July nonfarm payrolls report, scheduled for next week, the market is likely to enter a phase of building a bottom as supply-demand concerns ease."

[email protected] Choi Du-seon Reporter