$KORU fell 4% today to 17.27, with a trading value of 190 million. What’s interesting is that global merchandise export growth just hit a five-year high, so South Korea, as a major exporter, should theoretically be celebrating. Yet this triple-leveraged ETF kept sliding.
The problem isn’t the fundamentals; it’s the structure. $KORU is a daily-reset 3x leveraged long on $EWY . In a choppy market, decay alone can take a serious toll. Today it swung from a high of 18.33 to a low of 17.21—a 6% range. After threefold leverage, you could hold it for a week, see the underlying go nowhere, and still lose money. This kind of product is designed for intraday traders. Holding it as a trend trade is just handing fees to the market makers.
That said, the export data really is improving. If the Korean index starts trending steadily in one direction, $KORU could move dramatically. At this level, either get in and out quickly, or stay away.
I’ll sit tight and watch for a couple of days first.
The problem isn’t the fundamentals; it’s the structure. $KORU is a daily-reset 3x leveraged long on $EWY . In a choppy market, decay alone can take a serious toll. Today it swung from a high of 18.33 to a low of 17.21—a 6% range. After threefold leverage, you could hold it for a week, see the underlying go nowhere, and still lose money. This kind of product is designed for intraday traders. Holding it as a trend trade is just handing fees to the market makers.
That said, the export data really is improving. If the Korean index starts trending steadily in one direction, $KORU could move dramatically. At this level, either get in and out quickly, or stay away.
I’ll sit tight and watch for a couple of days first.