[Anchor]
Individual investors who invested in single-stock leverage products reportedly suffered losses exceeding 6.3 trillion won just two and a half months after their launch. Notably, investors aged 70 and older suffered losses of approximately 30 million won per account, and the scale of losses is likely even larger now.
For more, here is reporter Min Gyeongho.
[Reporter]
Single-stock leverage products were abruptly launched in late May when the won-dollar exchange rate soared past 1,500 won.
There were expectations that these products would expand consumer choices, curb capital outflows, and help stabilize the exchange rate.
However, as the share prices of Samsung Electronics and SK Hynix—which account for half of the KOSPI market capitalization—fluctuated wildly, trading at 2x leverage drew heavy criticism for amplifying the volatility of the KOSPI index.
[Kim Jaeseob / Member of the National Assembly's Political Affairs Committee (People Power Party, October 19): We had a Black Monday, Tuesday, Wednesday, Thursday, and Friday. Do you believe this was caused by the launch of single-stock leverage ETFs?]
[Lee Chanjin / Governor of the Financial Supervisory Service (October 19): I think that factor played a certain role as well.]
According to an analysis of data from 10 major securities firms by the Financial Supervisory Service, losses incurred by individuals who invested in single-stock leverage products from their launch through August 14 exceeded 6.3 trillion won.
At that point, leverage ETF prices had plummeted by around 60% from their peaks, with already realized losses from sales exceeding 2.3 trillion won.
Unrealized losses visible in accounts, though not yet sold, amounted to nearly 4 trillion won.
Investors in their 40s recorded the largest total loss at over 2 trillion won, but those aged 70 and older suffered a loss of about 30 million won per account, far more than double the overall average.
Moreover, excluding those under 20, the proportion of losses finalized through actual selling was lowest among investors in their 70s.
Compared to late July, realized losses from selling increased in August while valuation losses decreased, suggesting that so-called stop-loss selling—selling at a loss—became more active.
As recent prices of leverage ETFs have dropped another 30% to 40% compared to August 14 when the data collection ended, the total losses are likely even greater.
(Video Editing: Lim Yeojin)
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