Korea Retail Traders’ Chip Leverage Night: From “AI Belief” to a Bloodbath Loss of 70%

In the first half of the year, Korean retail traders treated KODEX SK Hynix single-stock leveraged and 494310 (KODEX Semiconductor Leverage) as “a can’t-lose wealth-management product.” After the single-stock leveraged ETF doors opened in late May, out of 140 trillion won (about $9.4 billion) in net purchases, more than 90% came from retail traders, while foreign capital only bought in 20 trillion won. The logic was simple: AI storage is in a favorable cycle, Samsung + Hynix accounts for half of KOSPI’s weight, and then you add two times leverage—if you don’t get on board, you’re just dumb.

The vibe changed overnight in July. SK Hynix plunged on a single day to a record low. The KODEX SK Hynix single-stock leveraged ETF pulled back about 70% from its June peak; compared with its first listing day, it was also down 50%. During the same period, many people also crossed borders to trade SOXL (US-listed 3x leveraged semiconductor) and BTC, stacking three layers of leverage—so liquidations were even more brutal. The mechanism also dragged it further down: leveraged ETFs rebalance every day—when they fall, investors are forced to cut positions; the resulting sell pressure rebounds onto the spot market. At one point, Gamma rebalancing accounted for 62% of institutional net selling.

Data from the Financial Supervisory Service of Korea: across the whole market, more than 1.2 million leveraged accounts breached their margin lines, about 340,000 of which were forcibly wiped to zero; people aged 20 to 30 made up 62%. Regulators have raised the minimum initial margin from 30,000 won to 300,000 won, but for many, their marriage-home down payments and pension money have already been wiped out first.

💡 Leveraged ETFs are short-term trading tools, not a “wealth-management miracle”—and that’s the tuition Korean retail traders just paid with 21.5 trillion won. #夏日创作营