Korean conglomerates are liquidating retail investors!
This is only the first wave of liquidation. The remaining nearly one million accounts are hanging on the collection line, and the trillion-won selling pressure hasnโt been cleared yet.
Also, Korean stocks are tracking the US stock ADR, and the ADRโs 36% premium hasnโt been digested.
The arbitrage crowd will drive down the US stock price to move it closer to Korean stocks.
Whatโs short isnโt just Korea deleveragingโyouโre also short the ADR premium reverting.
How to short?
Enter in batchesโdonโt go all-in. Small position becomes medium, medium becomes large!
Example starting from 1000U:
$192 trial position: 100U ร 3x,
$202 add 200U ร 4x,
$214 add another 300U ร 5x,
$228 go straight to 400U ร 5x to fully load.
Average entry price: $214.6, overall leverage 4.6x.
Each tranche liquidation price: 256/253/257/274. Stop-loss is unified at $242. In each tranche, stop-loss hits first, then liquidationโafter.
The exchange will never close the position for youโeither you admit defeat at $242, or you hold all the way to $120.
Do the math: $214.6 โ $120 down 44.1%; 4.6x leverage = 203%. 1000U โ 3030U.
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