The Product Made Its Own Weather
Imagine buying a boat whose engine also stirs up the waves. Korea's single-stock 2x products on Samsung and SK hynix work a bit like that.
To deliver twice the daily return, they must buy after a rise and sell after a fall, mostly near the close. On June 19, a 2.9% SK hynix gain implied roughly 260 billion won of extra share purchases and 270 billion in futures, per Korea Capital Market Institute estimates reported by Edaily. The same report put SK hynix's volatility at 101%, up from 90% before launch.
So part of the 6.313 trillion won loss through mid-August may come from swings these products helped feed. I can't say how much. Industry officials argue the funds don't create volatility from scratch, and chip stocks were already sliding.
My reading: retail wasn't only betting against the market. It was holding something that fed the same moves it was betting on.
$DOOD $AXIS $FOREST #EarningsSeason
#KoreanRetailLost6.3TrillionWonOnLeveragedETPs
Imagine buying a boat whose engine also stirs up the waves. Korea's single-stock 2x products on Samsung and SK hynix work a bit like that.
To deliver twice the daily return, they must buy after a rise and sell after a fall, mostly near the close. On June 19, a 2.9% SK hynix gain implied roughly 260 billion won of extra share purchases and 270 billion in futures, per Korea Capital Market Institute estimates reported by Edaily. The same report put SK hynix's volatility at 101%, up from 90% before launch.
So part of the 6.313 trillion won loss through mid-August may come from swings these products helped feed. I can't say how much. Industry officials argue the funds don't create volatility from scratch, and chip stocks were already sliding.
My reading: retail wasn't only betting against the market. It was holding something that fed the same moves it was betting on.
$DOOD $AXIS $FOREST #EarningsSeason
#KoreanRetailLost6.3TrillionWonOnLeveragedETPs