SK Hynix Falls 17.9%, But Leveraged ETF Plunges 47.5% on July 20, Exposing Daily Rebalancing Risk

According to CEO Bae Jae-kyou of Korea Investment Trust Management, leveraged and inverse single-stock ETFs pose significant risks to retail investors. On July 20, while SK Hynix shares fell 17.9%, related leveraged ETF products plunged 47.5%—far exceeding the theoretical decline of 35.8%—revealing the widening gap caused by daily rebalancing structures. Inverse 2x products also recorded losses 66.9 percentage points worse than theoretical returns, underscoring the compounding effect of frequent rebalancing in volatile markets.
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