SK Hynix’s US listing sparks a leveraged ETF craze, with six products set to launch next week

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

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