South Korea's Democratic Party Considers Lowering Single-Stock Leverage ETF Ratio to 1.5x from 2x

According to Yonhap News, on July 24, South Korea's Democratic Party's K-Capital Market Committee is reviewing a plan to reduce the leverage ratio of single-stock leveraged ETFs from 2x to 1.5x, citing concerns about excessive volatility disrupting markets. Academic calculations using a 2022 formula by Westminster University professor Matthew Cruz suggest optimal leverage ratios of 1.44x for SK Hynix and 1.84x for Samsung Electronics based on 10-year daily price data, both below the current 2x level. The proposed 1.5x reduction aligns closely with SK Hynix's calculated figure but may be unnecessarily low for Samsung Electronics.
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