Everyone a gambler? South Korea's leveraged ETFs surge 800%, SK Hynix's "2x Long" scale crushes Nvidia and Tesla

Is the South Korean stock market becoming the world's largest leveraged casino? Renowned financial commentary account The Kobeissi Letter released shocking data today (3rd), pointing out that the AUM of leveraged ETFs in the South Korean stock market has soared to a record $45 billion, surging 800% since the start of the year. Among them, the 2x long ETF tracking SK Hynix has dwarfed Nvidia and Tesla, becoming the world's largest single-stock leveraged product. Faced with a massive withdrawal of foreign capital, the extreme leverage of South Korean retail investors has triggered high market fear of potential collapse risks.

(Previous summary: Big short Michael Burry increases short positions on Nvidia and Tesla: Korean chips are 'the beginning of the end of AI')

(Background supplement: Should Samsung and Hynix's huge profits be shared with the people? The South Korean government denies establishing a 'profit-sharing think tank' and threatens to investigate the source of rumors.)

Table of Contents

Toggle

• Leveraged ETF AUM surges 800% in six months, exposure at record high
• Global single-stock leveraged ETF size comparison: South Korea dwarfs US stock giants
• Community uproar: Foreign capital flees wildly, South Korean retail investors in a 'big gamble'

The frenzy of South Korean investors to 'use leverage' seems to have reached a level that stuns the global financial community.

On July 3, 2026, the widely followed renowned financial commentary account The Kobeissi Letter (@KobeissiLetter) published a shocking chart on the X platform and warned in a very stern tone: 'Leverage in South Korean stocks is out of control.'

Leverage in South Korean stocks is out of control:

Assets under management (AUM) in South Korea's leveraged ETFs are up to a record ~$45 billion.

AUM has surged +800% since the start of 2026.

As a result, leveraged exposure as a % of free float market capitalization, the… pic.twitter.com/LD5YWQnCPF

— The Kobeissi Letter (@KobeissiLetter) July 3, 2026

Leveraged ETF AUM surges 800% in six months, exposure at record high

Data revealed by The Kobeissi Letter shows that the AUM of South Korean leveraged ETFs has experienced explosive and abnormal growth this year. Since the beginning of 2026, in just half a year, its AUM has soared an astonishing +800%, reaching a historic high of approximately $45 billion.

This phenomenon of the entire population using leverage has directly led to a distortion of market structure. The data indicates that the current 'ratio of leveraged exposure to free float market capitalization (shares actually available for public trading)' in the South Korean market has climbed to a record 2.9%, a figure that has more than tripled since January this year. This means that the daily volatility of the South Korean stock market is being severely amplified by massive leveraged funds, facing the risk of chain liquidation at any time.

Global single-stock leveraged ETF size comparison: South Korea dwarfs US stock giants

What shocked Wall Street analysts the most was a '2x Long SK Hynix ETF' listed in Hong Kong. This product, under the frenzied pursuit of South Korean retail investors, reached a peak asset size of $15 billion, directly becoming the 'world's largest single-stock leveraged product.'

| Single-Stock Leveraged ETFs (All 2x Long) | | --- | AUM Historical Peak | Market Position & Notes | | --- | --- | --- | | SK Hynix 2x Long | Exceeded $15 billion | World's largest single-stock leveraged product, primarily driven by South Korean speculative funds. | | Nvidia ($NVDA) 2x Long | Never exceeded $10 billion | Although the AI leader, its derivative leveraged product size is still far behind SK Hynix. | | Tesla ($TSLA) 2x Long | Never exceeded $10 billion | Previously a favorite target of retail investors, the leverage size still lags behind. | | Micron ($MU) / SanDisk ($SNDK) | Never exceeded $10 billion | Also memory and hardware giants, but lower concentration of leveraged funds. |

Community Uproar: Foreign Capital Flees Wildly, South Korean Retail Investors in a 'Big Gamble'

After this post was published, it quickly attracted over 75k views and heated discussions. Most overseas traders are horrified by the current state of the South Korean market. The comment section is filled with worries about a potential future crash. One netizen bluntly said: 'Just a little volatility can wipe them out.' Others attribute the phenomenon to South Korea's unique investment culture, sarcastically saying: 'Koreans are gamblers.'

An even more worrying warning lies in the 'internal vs. external opposition' of capital. Some Twitter users pointed out in replies that while South Korean retail investors are frantically borrowing to use leverage, foreign institutional investors regarded as 'smart money' are massively withdrawing. According to another set of related data, foreign investors have net sold over $140 billion in South Korean stocks in the past 12 months. When foreign capital is mercilessly dumping, and retail investors are catching the falling knife with up to 2x or even higher leverage, the countdown for the South Korean stock market's time bomb may have already been quietly triggered.