South Korean retail investors lose about 2.3 trillion won on single-stock leveraged ETFs in two months as regulators shift toward restrictions
On October 7, data compiled by South Korea’s financial regulators showed that investors are estimated to have lost 2.3 trillion won, or about $1.7 billion, between May 27 and August 14, since the launch of single-stock leveraged exchange-traded products in May this year. This marks the first time regulators have disclosed the total losses on this type of highly leveraged single-stock product. The figures cover only 10 of South Korea’s leading brokerages and do not represent the total losses of all South Korean investors. Since July, regulators have gradually introduced restrictions, including temporarily banning new products from being listed, raising minimum cash margin requirements, and requiring investors to complete specialized training before trading. In less than two months, South Korean regulatory policy shifted markedly from encouraging the launch of these products in May to curbing their expansion in July.
On October 7, data compiled by South Korea’s financial regulators showed that investors are estimated to have lost 2.3 trillion won, or about $1.7 billion, between May 27 and August 14, since the launch of single-stock leveraged exchange-traded products in May this year. This marks the first time regulators have disclosed the total losses on this type of highly leveraged single-stock product. The figures cover only 10 of South Korea’s leading brokerages and do not represent the total losses of all South Korean investors. Since July, regulators have gradually introduced restrictions, including temporarily banning new products from being listed, raising minimum cash margin requirements, and requiring investors to complete specialized training before trading. In less than two months, South Korean regulatory policy shifted markedly from encouraging the launch of these products in May to curbing their expansion in July.