First Day of Leverage Measures... Trading Volume Plummets to a Quarter

[Anchor]

Government regulatory measures on single-stock leverage products, which have been pointed out as a major cause of KOSPI volatility, went into effect yesterday (the 31st). The basic deposit requirement was raised from 10 million won to 30 million won. While trading volume dropped to a quarter of the previous day's level, the government is also reviewing additional measures.

Reporter Lee Tae-gwon has the details.

[Reporter]

When placing a buy order for a single-stock leverage product related to SK Hynix, a notice pops up stating that a deposit of at least 30 million won is required.

The supplementary measures for single-stock leverage products, which raised the basic deposit requirement from 10 million won to 30 million won, took effect yesterday.

Previously, substitute securities such as stocks, ETFs, and bonds were recognized as deposits up to 70% of their market value, but now the full 30 million won must be held in cash.

In addition, even if a holder sells their stocks, the funds are not recognized as a deposit until two trading days later when settlement is completed. Therefore, repetitive trading on the same day is impossible unless additional funds are deposited.

Yesterday, as underlying stocks Samsung Electronics and SK Hynix surged, single-stock leverage products also closed up 48% to 60%, with the trading value for these 16 products recorded in the 3 trillion won range.

Since their listing in late May, the daily average trading value had been around 11 trillion won, meaning it has plummeted to about a quarter of that level.

[Interview / Kim Jae-seung, Researcher at Hyundai Motor Securities]
"With a 30 million won cash requirement, it is practically difficult for retail investors to participate. Ultimately, it also seems to have the function of preventing continuous rotation and repeated trading."

However, some point out that since it is still the first day of implementation, the regulatory effects need to be monitored a bit longer.

[Interview / Lee Sang-hyun, Researcher at Meritz Securities]
"It seems premature to judge based on just a single day. Today, after all, the market itself was on an upward trajectory, so from an investors' perspective, it wasn't a situation where they would naturally turn exclusively to single-stock ETFs..."

Financial authorities are also reviewing additional supplementary measures, such as setting individual investment limits for single-stock leverage and adjusting multipliers depending on market conditions.

(Photo courtesy of Kim Hyun-sang, Seol Chi-hwan | Video by Kim Jin-won | Graphics by Han Heung-su)
※ Please note: This article was translated by AI and may contain errors.