Overview
- Retail investors rushed into single-stock leveraged ETFs that launched in late May, concentrating bets on Samsung Electronics and SK hynix and making those products drive a large share of daily trading.
- Forced liquidations topped about 1 trillion won in June and 993 billion won in July, and estimates put retail losses from the leveraged trade near $38.7 billion.
- Regulators moved in mid-to-late July to raise cash-deposit and margin rules and to halt new leveraged-ETF listings, actions that sharply cut trading in the riskiest products.
- Korean retail investors shifted money overseas, buying about $4.6 billion of U.S. stocks in July while foreign institutions continued heavy selling that has pressured the won.
- Volatility has eased from July’s peak and the KOSPI has staged sharp rebounds, but markets remain fragile and foreign fund caution will be the key test for a sustained recovery.