Retail Investors Lose Over W6 Trillion in Single-Stock Leverage Products in Months

[Anchor]

Individual investors who rushed into single-stock leveraged products have suffered more than 6.3 trillion won in losses just two and a half months after their launch. Notably, elderly investors in their 70s and older recorded losses of about 30 million won per account, and these losses may have grown even larger since then.

Here is a report by Min Gyeongho.

[Reporter]

Single-stock leveraged products were abruptly launched in late May, when the won-dollar exchange rate soared past 1,500 won.

There were expectations that the 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, criticisms mounted that trading at double the volatility only amplified swings in the KOSPI.

[Kim Jaeseop / National Assembly Political Affairs Committee Member (People Power Party, the day before yesterday): There were Black Mondays, Tuesdays, Wednesdays, Thursdays, and Fridays. Do you believe this is due to the launch of single-stock leveraged ETFs?]

[Lee Chanjin / Governor of the Financial Supervisory Service (the day before yesterday): I do think that played a part to a certain extent.]

According to an analysis of data from 10 major securities firms by the Financial Supervisory Service, individual investors who invested in single-stock leveraged products from their launch through August 14 suffered losses exceeding 6.3 trillion won.

This period coincided with leveraged ETF prices plunging around 60 percent from their peak, with realized losses from executed sales already surpassing 2.3 trillion won.

Unrealized losses visible in accounts, though unsold, amounted to nearly 4 trillion won.

While investors in their 40s suffered the largest total losses at over 2 trillion won, those aged 70 and older recorded an average loss of about 30 million won per account, more than double the overall average.

Furthermore, excluding those under 20, investors in their 70s had the lowest rate of locking in losses through actual sales.

Compared to late July, realized losses from sales increased in August while unrealized losses decreased, suggesting that so-called stop-loss selling at a loss occurred more actively.

With recent prices of leveraged ETFs falling an additional 30 to 40 percent compared to August 14 when the tally closed, actual losses are likely even greater.

(Video by Lim Yeojin)
※ Please note: This article was translated by AI and may contain errors.