SK Hynix leveraged ETF plunges for a day 20% ... what is the ‘measure’ the financial authorities are looking into?

The single-stock leveraged ETF tied to SK Hynix fell by 7in 13a day. The fact that its trading price slipped below 20won has prompted the financial authorities to move. If you read this article, you can see both the direction of the leveraged ETF measures now under review by the authorities and the contradictory trends unfolding in the semiconductor ETF market. Missing this could increase losses.200.

A single-stock leveraged product that domestic individual investors had bought heavily collapsed sharply in just a day. As the vulnerability of the product structure became reality, the regulatory authorities are coordinating responses to the risks and market concentration. The discussion on leveraged measures is now becoming more concrete.

On the same day the situation broke out, overseas asset managers expanded covered call ETF products, a strategy that earns returns by selling options, and semiconductor ETF products in Hong Kong’s retail market. Against the rising risks, their efforts to target investors are intensifying.

Mirae Asset Life also broadened its lineup by adding Korean, U.S. and Chinese semiconductor ETF products to its variable funds.3In effect, individual investors now have a way to make an indirect bet on semiconductors through funds.

The Bank of Korea said the expansion trend in the semiconductor sector is likely to continue through next year. While the industry outlook is bright, some also point out that a market structure in which participation overlaps like this could blow up at any time.

Some say that the structural problems of single-stock leveraged ETFs could distort the market. That is why calls are growing to improve the system.