SK Hynix Surges 13%, 2x Leveraged ETF "Reverse Bungee Jumps" Plunging 40%

Odaily Odaily Planet Daily News: The leveraged ETF tracking chip giant SK Hynix, "KIM ACE SK Hynix Individual Stock Leveraged ETF," once plunged 40% shortly after Tuesday's opening (with the latest decline narrowing to about 30%), while SK Hynix shares surged over 13% during the same period.

Previously, this ETF had exhibited abnormal fluctuations on Monday, when it surged 50% at the close, while its underlying stock, SK Hynix, fell nearly 8%. The "reverse bungee jumps" for two consecutive days have intensified market scrutiny of the ETF's manager, Korea Investment Management Co. The company stated that the initial abnormality of the $37 million fund on Monday was due to insufficient liquidity.

Jung In Yun, CEO of Fibonacci Asset Management, said, "While such price imbalances are rare, they are not unprecedented. ETFs typically rely on market makers to ensure prices align with the underlying assets. However, during the closing auction on Monday, these safeguards can weaken, especially in niche products with limited trading volume." (Aastocks)