SK Hynix's US listing sparks a wave of leveraged ETFs, six products launching next week

Odaily Odaily reports that SK Hynix's record-breaking US listing has spurred a wave of new leveraged products linked to the stock on Wall Street. Issuers including ProShares, Leverage Shares, and Rex Shares are preparing to launch products offering 2x long exposure to SK Hynix ADRs, with some also working on inverse products. According to information on the issuers' websites, at least six products are set to launch next week. SK Hynix leveraged ETFs are extremely popular in the South Korean market.

SK Hynix, Samsung Electronics, and their linked leveraged products together account for over 70% of trading volume on the South Korean stock market, exacerbating volatility in the KOSPI index. "Some elements of retail activity seem increasingly momentum-driven, and the growth of single-stock ETFs has amplified trading volume and volatility in large-cap stocks," said John Cho, Korean equity fund manager at JPMorgan Asset Management. "The emergence of leveraged ETFs is not a healthy signal and may indicate late-cycle retail behavior." Analysts stated that the concentration of single-stock leveraged products has begun to impact the underlying stocks they aim to track. The new batch of US-listed leveraged ETPs means daily rebalancing capital flows will expand, potentially adding to already high volatility. (Jin Shi)