South Korea Stock Market Leverage Frenzy: ETF Scale Surges to $45 Billion, Leverage Exposure Hits Record High

Odaily Planet Daily News The Kobeissi Letter published an analysis pointing out that the leverage trading frenzy in the South Korean stock market continues to spiral out of control, with the Assets Under Management (AUM) of leveraged ETFs soaring to approximately $45 billion, hitting a record high and accumulating a cumulative increase of over 800% since the beginning of 2026.

Meanwhile, the leverage exposure as a proportion of free-float market capitalization has risen to approximately 2.9%, more than tripling from January levels, indicating that the available tradable shares in the market are being highly leveraged and amplified.

At the individual stock level, the 2x leveraged SK Hynix ETF listed in Hong Kong once grew to about $15 billion, becoming the world's largest single-stock leveraged product.

In contrast, 2x leveraged ETFs tracking popular targets such as Micron, NVIDIA, SanDisk, and Tesla have historically never exceeded $10 billion in scale.

The analysis points out that the leverage level in the South Korean market has reached an extreme state, and the rapid accumulation of risk exposure has raised concerns about potential volatility amplification.