Retail investors in South Korea net bought approximately 453.8 billion won of single-stock leveraged exchange-traded funds tracking Samsung Electronics and SK Hynix on 24日, reversing a three-day selling streak totaling roughly 500 billion won from 21日 to 23日. The buying surge followed a sharp price decline on 24日, when Samsung Electronics and SK Hynix stocks fell 7-8%, driving their respective leveraged products down 15-16%. The reversal occurred ahead of stricter deposit requirements set to take effect 31日, which will raise the minimum cash deposit from 10 million won to 30 million won and eliminate the use of substitute securities.
Retail Investors Net Sold 500 Billion Won Over Three Days
According to Korea Exchange and KOSCOM CHECK on 26日, retail investors net sold 14 single-stock leveraged products (combined total) consecutively from 21日 through 23日. Samsung Electronics' seven single-stock leveraged products recorded net selling of 57.64 billion won on 21日, 76.95 billion won on 22日, and 24.25 billion won on 23日. SK Hynix's seven single-stock leveraged products saw net selling of 162.16 billion won on 21日, 45.79 billion won on 22日, and 180.37 billion won on 23日.
Single-Day Buying Reversal Totals 453.8 Billion Won on 24日
The selling trend reversed completely on 24日, the fourth trading day following the Financial Services Commission's supplementary measures announcement on 16日 (excluding 20日, the first trading day after the announcement). On 24日 alone, retail investors net purchased 103.8 billion won of Samsung Electronics' seven leveraged products and 350.02 billion won of SK Hynix's seven leveraged products, totaling 453.83 billion won. This single-day buying volume offset the three-day selling total, shifting the five-day cumulative flow (20日-24日) from net selling to net buying. Over this period, retail investors net purchased 12.51 billion won of Samsung Electronics leveraged products and 103.12 billion won of SK Hynix leveraged products, for a combined total of 115.63 billion won.
Leveraged Products Drop 15-16% as Underlying Stocks Fall 7-8%
On 24日, described as "Black Friday," Samsung Electronics and SK Hynix closed down 7-8%, causing their single-stock leveraged products to plunge 15-16%. KODEX Samsung Electronics Single Stock Leverage fell 15.10%, while KODEX SK Hynix Single Stock Leverage dropped 16.25%. TIGER Samsung Electronics Single Stock Leverage and TIGER SK Hynix Leverage declined 15.39% and 16.17%, respectively. Excluding KODEX SK Hynix Single Stock Leverage (13,015 won), the 13 remaining products traded at 11,000-12,000 won, nearly half their May 27 listing price of 20,000 won. The price decline appears to have attracted bargain-hunting flows.
Financial Services Commission Advances Deposit Requirement to 31日
The Financial Services Commission announced on 24日 that it will implement the strengthened basic deposit requirement on 31日, ahead of the originally planned August timeline, to stabilize demand swiftly. On 16日, the commission unveiled supplementary measures raising the basic deposit from 10 million won to 30 million won in cash only, eliminating substitute securities (stocks, ETFs, bonds) previously counted at 70% of market value. Investor community posts indicated motivation to "average down" before the regulation takes effect: "Deposit increases make buying harder, so averaging down must happen now" and "When it drops, I'll average down by selling inverse products and increasing leverage weight."
Analyst Attributes Volatility to Sharp Decline Timing
Lee Sang-hyun, a researcher at Meritz Securities, stated: "Rather than the listing of domestic single-stock leveraged products significantly expanding the stock price volatility of domestic semiconductor companies, it is more reasonable to view that the sharp decline in semiconductor company stock prices occurring while leveraged products were listed amplified market concerns. [The supplementary measures] are expected to bring a market stabilization effect."
FAQ
What did retail investors do on 24日 regarding single-stock leveraged ETFs?
Retail investors net purchased approximately 453.8 billion won of single-stock leveraged ETFs tracking Samsung Electronics and SK Hynix on 24日, reversing a three-day net selling streak totaling roughly 500 billion won from 21日 to 23日.
Why did retail investors increase buying of leveraged products on 24日?
The buying surge followed a sharp price decline on 24日, when the underlying stocks fell 7-8% and leveraged products dropped 15-16%, creating bargain-hunting opportunities. Additionally, stricter deposit requirements set to take effect 31日 appear to have motivated investors to purchase before the regulation is implemented.
What regulatory changes take effect 31日 for single-stock leveraged products?
The Financial Services Commission will raise the basic deposit requirement from 10 million won to 30 million won in cash only on 31日, eliminating the use of substitute securities (stocks, ETFs, bonds) previously counted at 70% of market value in deposit calculations.
