KOSPI plunge widens volatility in single-stock leveraged products
8As KOSPI plunged on a geopolitical shock, volatility in single-stock leveraged products widened sharply. In the afternoon, a sell-sidecar was triggered at 1p.m. 31minutes 58seconds after the sell-sidecar was triggered, and KOSPI200 futures fell more than 5%, lasting for 1minutes.
8As KOSPI plunged amid geopolitical concerns, volatility in single-stock leveraged products increased. This means that the range of profit and loss fluctuations for investors holding these products is widening.
It was noted that single-stock leveraged products based on stocks ranked 1th and 2th by market capitalization have grown rapidly recently. With this structure, volatility in individual stocks can be amplified into index volatility.
In the afternoon, a program sell-order temporary suspension, known as a sell-sidecar, was triggered at 1p.m. 31minutes 58seconds.
At the same time, KOSPI200 futures prices fell more than 5% from the previous session, and 1 remained in that state for minutes.
The index widened its intraday decline to as much as 6.14%, lowering its low.
At the same time, it was reported that Iran attacked U.S. military facilities in the Middle East, including those in Kuwait and Bahrain, at 80 locations.
During this sharp decline, single-stock leveraged products were exposed to extreme price fluctuations.
Market observers cite the growth of leveraged products based on top market-capitalization stocks as a factor increasing volatility.
Sources: 연합인포맥스
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