Brokerages raise basic deposit for single-stock leverage amid concerns over shrinking trading volume.

The CEOs of brokerages held an emergency meeting on the day of the month. This was because single-stock leverage is eating away at market trading volume. The key conclusion of the meeting was to raise the basic deposit (the minimum guarantee that investors must deposit with brokerages).7four14seven

The real reason behind this meeting was how quickly single-stock leverage has been eroding capital. Among the top trading volume products, a substantial number were single-stock leveraged. The speed at which market money is concentrating on specific products has exceeded controllable limits.10five4nine

Concerns were raised that mechanical selling mechanisms exacerbate declines during sharp downturns. The structure causes automatic sell-offs when certain price levels are reached, accelerating downward pressure. Fears that the semiconductor sector's downward trend is not yet over were also noted.

Brokerages that are managing risk plan to increase the basic deposit requirements to curb reckless investments. Specific details regarding the increase and implementation timing will be separately announced by each brokerage.

The message from experts is simple. Single-asset leveraged ETFs are not meant for long-term holding. This is supported by the fact that the average return on related ETFs has already halved.

Meanwhile, the listed company SMAC announced that it has secured orders for machine tools and supply contracts for semiconductor equipment.