Overview
- The KOSPI plunged about 10% in a single session on June 23, 2026, when sharp falls in Samsung Electronics and SK Hynix triggered one of five circuit breakers that wiped roughly ₩400 trillion in market value during June.
- South Korea approved 16 single-stock 2x and inverse ETFs on May 27 that drew rapid retail money, swelling domestic assets to about 14 trillion won (roughly $9.1 billion) while a Hong Kong-listed SK Hynix 2x ETF reached about $16.8 billion.
- The ETFs replicate via on-exchange single-stock futures and use daily 2x leverage, a combination that creates a timing mismatch because futures trade 15 minutes after stocks and ETFs stop and causes compounding effects that magnify moves for holders who do not trade daily.
- Financial Supervisory Service Governor Lee Chan-jin publicly blamed the products for worsening volatility, estimated large brokerage commissions from the boom, and said regulators are considering steps to stabilize markets as the National Pension Service is constrained from buying dips.
- Market fragility remains as turnover and leveraged positions stay high, reported margin-debt figures differ across sources, retail investors who hold most ETF shares face heavy losses, and watchpoints include continued ETF flows, cross‑market spillovers from Hong Kong listings, and possible regulator intervention.