Samsung Electronics and SK Hynix leveraged ETF products recorded 12 trillion won in trading volume on May 14, despite the underlying Korean stocks hitting new lows during a market downturn on May 13-14. Investors continued betting on short-term rebounds through 2x leveraged products even as prices dropped to record lows. The heavy trading - representing 39% of total ETF volume on May 15 - prompted regulatory authorities and industry groups to discuss investor protection measures.
Leveraged ETF Trading Volumes Reach 12 Trillion Won on May 14
According to the Korea Exchange on May 15, 14 single-stock leveraged ETF products linked to Samsung Electronics and SK Hynix recorded trading volume of 12 trillion 519 billion won on May 14. When combined with 2 inverse ETF products, the total 16 products generated trading volume of 18 trillion 296.7 billion won, accounting for 39.04% of the total ETF trading volume of 46 trillion 862.5 billion won that day. On May 15, the same 16 products recorded trading volume of 13 trillion 11.7 billion won, representing 38.18% of the total ETF trading volume of 34 trillion 79.2 billion won.
The 14 leveraged products (excluding the 2 inverse products) accounted for 25.72% of total ETF trading on May 14. KODEX SK Hynix leveraged ETF recorded the highest single-day trading volume at 6 trillion 590.6 billion won on May 14, followed by TIGER SK Hynix leveraged ETF at 2 trillion 487.5 billion won. Samsung Electronics-linked products also saw concentrated trading, with KODEX Samsung Electronics leveraged ETF recording 1 trillion 938.8 billion won and TIGER Samsung Electronics leveraged ETF recording 821.4 billion won on the same day.
Samsung and SK Hynix Leveraged Products Hit Record Lows
KODEX Samsung Electronics leveraged ETF dropped to 13,115 won during trading on May 13, marking a new low since listing. KODEX SK Hynix leveraged ETF fell to 12,240 won during trading on May 14, also setting a new record low. The May 14 intraday low for KODEX SK Hynix leveraged ETF was 72.4% below its peak of 44,385 won, representing less than one-third of the peak price. Despite reaching these record lows as the underlying stocks plummeted, trading activity remained elevated as investors engaged in bottom-fishing and short-term rebound speculation.
Financial Investment Association Holds Emergency Meeting on May 14
The Financial Investment Association convened an emergency meeting on May 14 with 10 domestic comprehensive financial investment companies in attendance to discuss self-regulatory measures related to single-stock leveraged ETFs. The meeting reviewed potential measures including strengthening investor education, raising basic deposit standards, enhancing liquidity provider functions, and dispersing trading timing. President Lee Jae-myung directed Korea Exchange Chairman Jeong Eun-bo during a work report on May 15 to prepare supplementary measures regarding Samsung Electronics and SK Hynix single-stock leveraged ETFs.
FAQ
What trading volume did Samsung and SK Hynix leveraged ETFs record on May 14?
The 14 leveraged ETF products linked to Samsung Electronics and SK Hynix recorded trading volume of 12 trillion 519 billion won on May 14. When including 2 inverse products, the total 16 products generated 18 trillion 296.7 billion won in trading volume, accounting for 39.04% of total ETF trading that day.
What were the record low prices for Samsung and SK Hynix leveraged ETFs?
KODEX Samsung Electronics leveraged ETF hit an intraday low of 13,115 won on May 13. KODEX SK Hynix leveraged ETF dropped to 12,240 won during trading on May 14, which was 72.4% below its peak of 44,385 won.
What regulatory actions were taken regarding leveraged ETF trading?
The Financial Investment Association held an emergency meeting on May 14 with 10 comprehensive financial investment companies to discuss self-regulatory measures. President Lee Jae-myung directed Korea Exchange Chairman Jeong Eun-bo on May 15 to prepare supplementary measures for single-stock leveraged ETFs.
