Single-Stock Leverage Trading Volume Falls Below 1 Trillion Won for First Time... "Interest Fading Fast"

Trading volume for 16 single-stock leverage exchange-traded funds (ETFs), including two inverse products, has fallen below 1 trillion won for the first time.

This comes just four trading sessions after the implementation of tightened regulations, such as raising the basic deposit requirement.

According to the Korea Exchange, the total trading volume for the 16 single-stock leverage and inverse ETFs was tallied at 919.8 billion won today (the 5th).

This marks the first time the trading volume for these products has dropped below 1 trillion won since their listing on May 27.

This decline is attributed to tightened regulations implemented since the 31st of last month, which raised the basic deposit requirement from 10 million won to 30 million won.

The trading volume for these 16 products stood at 12.4485 trillion won on the 30th of last month, the day before the measures took effect, but plummeted to 3.1518 trillion won on the 31st, the first day of implementation. It continued to shrink into the 1 trillion-won range on the 3rd (1.3872 trillion won) and the 4th (1.2556 trillion won).

Their share of total ETF trading volume recorded 5.7% today, showing a slight increase compared to the 3rd (5.4%) and the 4th (4.5%).

This appears to be because total ETF trading volume for the day decreased to 15.9 trillion won, down from the 3rd (17.8409 trillion won) and the 4th (19.1204 trillion won).

However, this is still a sharp decrease compared to before the regulation took effect, when they accounted for 30% to 40%.

The ratio of trading volume to market capitalization (trading volume / market capitalization × 100), an indicator used to gauge the turnover rate of these products, shrank back down to 11.4%.

This ratio stood at 219.1% on the 30th of last month before dropping to 15.7% on the 4th.

Except for net purchases of 6.8 billion won in SOL SK hynix Futures Single Stock Inverse 2X, individual investors net-sold most of the products.

KODEX SK hynix Single Stock Leverage, which has the largest net assets, saw 56.7 billion won worth sold off, the second-highest among all ETFs, while KODEX and TIGER Samsung Electronics Single Stock Leverage also saw net sales of 23.2 billion won and 6.2 billion won, respectively.

Kim Jae-seung, a researcher at Hyundai Motor Securities, analyzed, "Following the regulations on single-stock leverage products, individual investors' interest in single-stock leverage products is declining rapidly." He added, "With the early implementation of tightened investment requirements for single-stock leverage products starting on the 31st of last month, funds that had been concentrated in the top two companies by market capitalization are gradually shifting toward other sectors and strategies."

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.