SK Hynix US Listing Sparks Leveraged ETF Craze, Six Products Launching Next Week

SK Hynix's record-breaking US listing has sparked a new wave of leveraged products tied 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 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 their related leveraged products together account for over 70% of trading volume in the Korean stock market, exacerbating volatility in the KOSPI index. John Cho, Korea Equity Fund Manager at J.P. Morgan Asset Management, stated: "Some elements of retail activity seem increasingly momentum-driven, and the growth of single-stock ETFs has amplified trading volume and volatility for 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 very 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)