South Korea’s single-stock leveraged ETF sees a sharp 27% drop in daily trading volume; before a new $30 million KRW margin rule takes effect, trading funds cool off

robot
Abstract generation in progress

PANews July 28 news, according to South Korean media outlet Daum, as financial regulation in South Korea tightens, trading demand for single-stock leveraged ETFs has quickly cooled.

Data from South Korean exchanges shows that on July 27, the total trading volume of 14 leveraged ETFs and 2 inverse ETFs based on Samsung Electronics and SK hynix fell to 7.46 trillion won, down 27% from the previous trading day, and down more than 30% compared with the average daily volume from the prior week. Their share of total ETF market trading volume dropped to 36.9%. Among them, products related to SK hynix recorded trading volume of 5.23 trillion won, accounting for about 70% of the total trading volume of all single-stock leveraged and inverse ETFs.

The market believes the slowdown is mainly driven by expectations of new South Korean financial regulatory rules. Starting July 31, for new purchases or additional holdings of single-stock leveraged ETFs/ETNs by retail investors, investors must hold a cash base margin of 30 million won, and regulators also plan to raise the minimum trading unit to curb high-frequency intraday trading and reduce market speculation risk.

View Original
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
  • Reward
  • Comment
  • Repost
  • Share
Comment
Add a comment
Add a comment
No comments
  • Pinned