Strategist: Samsung Electronics, SK Hynix Leveraged ETFs Face Reality Check

Odaily Planet Daily reported that in a report published on Smartkarma, derivatives and quantitative strategist Gordian Schneider pointed out that the 2x leveraged exchange-traded funds (ETFs) tracking Samsung Electronics and SK Hynix would need to rise approximately 33% to return to their June 22 levels, implying the underlying stocks need to rebound by about 16.5%.

The report stated that shares of Samsung Electronics and SK Hynix both fell by double digits on Tuesday, causing the related ETFs to drop nearly 25%. The Samsung 2x leveraged ETF has accumulated a decline of 5.4% since its launch on May 27. He noted that the newly launched single-stock 2x leveraged ETFs in South Korea can enhance returns in trending markets, but their value can quickly erode during periods of high market volatility, making them most suitable for short-term tactical momentum investing. (Jin Shi)