Hynix ADR premium expands to 34.8%! Two whales are betting it will pull back, with an unrealized loss of $350k on paper

Hyperliquid 上的 US-listed semiconductor memory company Hynix ADR (SKHY) is quoted at $166.31, while its Korean-listed underlying (SKHX) is quoted at $1,234.10. After conversion, the ADR premium has widened to 34.8%, about 5 times the premium for the same category of TSM. The two top whales that previously bet on the price gap narrowing are still in the trade. Their combined positions on both sides total approximately $13.69M, with an unrealized loss of about $356k; however, the funding rate structure has flipped—one of them has changed from paying on both sides to net receiving about $128 per hour.
(Background: Hynix ADR jumped 13% on its first day, while the Korean underlying (SKHX) then crashed back 15%: leveraged ETFs poured in, and volatility kept getting bigger)
(Additional background: rumors that Samsung is rushing to list in the US were exposed, but it was also revealed that it secretly asked SK Hynix about ADR channels)

Table of Contents

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• The two whales are still betting on the convergence of the spread
• The funding rate flips—turning “paying both sides” into “getting paid”
• Same “national champion stock,” but Hynix’s ADR premium is 5 times that of TSM

Key takeaways

• SKHY at $166.31, SKHX at $1,234.10. Hynix ADR premium is widened to 34.8%, about 5 times that of TSM.
• The two converging whales’ combined bilateral positions total about $356k, with an unrealized loss of about $356k.
• With the funding rate turning negative, the whale starting with 0xf51 now nets about $128 per hour, ending the prior situation where it had to “pay on both sides.”

Hynix ADR’s premium is widening again—pretty brutal. Hynix ADR (SKHY) on Hyperliquid is quoted at $166.31. At the same time, the Korean underlying (SKHX) contract is at $1,234.10. Converting with each SKHY corresponding to 0.1 share of the Korean underlying, the US side is now worth 34.8% more. In plain terms: same Hynix, the “paper” listed on the US market—the market is willing to pay about one-third more.

Two whales are still betting on the convergence of the spread

So-called “convergence trades” are bets that the price gap between the two sides will narrow. Go long the relatively cheaper Korean underlying (SKHX) and short the relatively more expensive US ADR (SKHY). As long as the premium shrinks, you can profit on both ends. The problem is that these days the premium hasn’t narrowed—instead it’s widening. In effect, the two whales are standing on the wind-resistant side of the wave. Currently, their combined bilateral positions are about $13.69M, with an unrealized combined loss of about $356k.

• Address starting with 0xf51: 10x full-position long 2,624.9 SKHX and 5x perps short 17,038 SKHY. Bilateral size is about $356k, with net unrealized loss of about $517k.
• Address starting with 0x257: 10x perps long 1,993.9 SKHX and short 31,025 SKHY. Bilateral size is about $13.69M, with net unrealized profit of about $161k.

One loses and one profits—the two combined are still net losing. The trade direction that’s “right” is that the spread will eventually converge, but in the short term the market moves the other way first, and once leverage amplifies it, the unrealized numbers look ugly for you to see first.

Funding rates flip—“paying both sides” becomes “getting paid”

Compared with unrealized losses on paper, the real change this round is in the funding rates. Versus yesterday, SKHX’s hourly funding rate is currently about -0.00706%, while SKHY is about -0.00354%; both have flipped to negative. Put into a convergence pair, the side long SKHX starts to receive money, while the side short SKHY continues to pay.

After netting out both sides, based on the current positions, the whale starting with 0xf51 can now net receive about $128 per hour. The awkward situation of “having to pay on both sides” is temporarily over. The position is still underwater on paper, but at least instead of “waiting to pay,” it becomes “waiting to get paid.” For anyone holding long-term hoping the spread converges, the mindset has flipped.

Same “national champion stock,” but Hynix’s premium is 5 times TSM’s

It’s much more intuitive to use TSM as the comparison. On Hyperliquid, TSM’s ADR (TSM) is quoted at $410.35, and the Korean underlying (Taiwan stock’s TSM) is at 2,470 New Taiwan dollars. Using the USD to NTD rate of 32.19, and converting one ADR corresponds to 5 shares of the underlying, TSM’s ADR premium is only about 7.0%. Hynix’s current 34.8% premium is nearly 5 times TSM’s.

FAQ

What is the Hynix ADR premium?

It refers to the magnitude by which the price of Hynix ADR (SKHY, with each share corresponding to 0.1 share of the Korean underlying) on Hyperliquid is higher than the price of the Korean underlying (SKHX) after conversion. Currently SKHY is at $166.31, with a premium of 34.8%.

What are the whales in convergence trades betting on?

They bet that the price gap between the ADR and the underlying will narrow. The approach is to go long the cheaper SKHX and short the more expensive SKHY. Currently the two whales’ combined bilateral positions are about $356k, and because the premium is continuing to expand, the net unrealized loss is about $356k.