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

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Golden Finance reported that on June 24, a report published on Smartkarma by derivatives and quantitative strategist Gerdonts Schneider stated that the 2x leveraged exchange-traded funds (ETFs) tracking Samsung Electronics and SK Hynix would need to rise by about 33% to return to the level of June 22, which implies their stocks would need to rebound by about 16.5%. The report said that on Tuesday, the share prices of both Samsung Electronics and SK Hynix fell by double digits, causing the prices of the related ETFs to drop by nearly 25%, including Samsung’s 2x leveraged ETF, which has already fallen cumulatively by 5.4% since its launch on May 27. He said that Korea’s newly launched, single-stock 2x leveraged ETF can enhance returns in trending markets, but when market volatility is high it quickly erodes value, so it is best suited for short-term tactical momentum investing.
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