Strategist: Leveraged ETFs for Samsung Electronics and SK Hynix Face Reality Check

Odaily Planet Daily News: A report published by derivatives and quantitative strategist Godertz Schneider on Smartkarma points out that a 2x leveraged exchange-traded fund (ETF) tracking Samsung Electronics and SK Hynix would need to rise by approximately 33% to return to its June 22 level, implying that the underlying stocks would need to rebound by about 16.5%.

According to the report, shares of Samsung Electronics and SK Hynix both fell by double digits on Tuesday, causing the related ETFs to drop nearly 25%. Among them, the Samsung 2x leveraged ETF has fallen a cumulative 5.4% since its launch on May 27. Schneider stated that the newly launched single-stock 2x leveraged ETFs in South Korea can enhance returns in a trending market, but their value can be quickly eroded during periods of high market volatility. Therefore, they are most suitable for short-term tactical momentum investing. (Jinshi Data)