South Korean Leveraged ETF Volume Plunges 90% After Regulatory Hike

Trading volume for SK Hynix and Samsung Electronics leveraged ETFs dropped to one-tenth of prior levels following a threefold increase in cash collateral requirements by South Korean regulators.

Woofun AI data shows that trading volumes for leveraged ETFs tracking South Korea’s major chip manufacturers have contracted sharply following new regulatory measures. The KODEX Single Stock ETF for SK Hynix recorded 59 million shares traded on Monday, marking its lowest level since June 4th, while the Samsung Electronics-linked ETF hit its lowest volume since its late-May launch.

Regulators increased the minimum cash collateral requirement for these single-stock leveraged ETFs from 10 million Korean won to 30 million Korean won. Consequently, the total trading scale of related products fell to approximately one-tenth of the 12.4485 trillion Korean won recorded on July 30th, the last trading day before the rule took effect. Peter Park of NH Investment & Securities stated that retail speculative leveraged trading has effectively ended, as investors face high cash thresholds for new purchases despite unrestricted selling.