$SKHY SK Hynix ADR oversubscription is quite extreme – according to Reuters, it has already exceeded 7 times, and trading is expected to start on Nasdaq on July 10.

So why is the ADR so hot while SK Hynix's Korean-listed shares are falling?

I think there could be three reasons.

First, institutions need to free up cash to participate in the ADR subscription. Funds that originally held Korean shares may reduce positions first and convert to USD for the US ADR.

Second, arbitrage funds are positioning in advance. Later, if the ADR trades at a premium, the common trade is to go long on the ADR and short the Korean shares, or sell Korean shares first and switch to the ADR after listing.

Third, the Korean market itself is digesting semiconductor profit-taking and short-term risk sentiment, so the decline cannot be entirely attributed to the ADR.

The key is Friday.

If $SKHY opens high and continues higher after listing, it means US capital is willing to give a higher valuation to the HBM leader, and then SK Hynix's Korean shares will likely play catch-up later.

For 7709, this is the most direct leverage tool because it is a Hong Kong-listed 2x long SK Hynix ETF – gains and losses are amplified. If the ADR performs strongly on Friday's listing, the market may pre-trade the Korean shares' catch-up expectation.

For the DRAM ETF, the impact is mainly on the memory sector sentiment during US trading hours. If $SKHY strengthens, the entire memory basket tends to be lifted.

So the most important thing on Friday is not how much $SKHY opens up, but whether it can close near the highs and whether the ADR premium over Korean shares can hold. I personally lean toward a high-open, low-close scenario. If the ADR sees a premium of around 20% or even higher on the first day, I wouldn't be surprised, but the key is whether the close can hold.

If the premium holds, that is a bullish signal for SK Hynix Korean shares, 7709, the DRAM ETF, and $MU . If it opens too high and quickly retreats, it could become a short-term profit-taking event.

Additionally, from a technical perspective, SK Hynix Korean shares have already bounced from the daily EMA 55. If the recovery continues, I will personally focus on the 2.4 million–2.5 million won range. For the DRAM ETF, I'll watch the EMA 20 around $66. For MU, I'll watch the 980–1000 and 1030 levels.

If these levels reach a rebound, I will consider reducing positions in batches and switching into the SK Hynix ADR.