A Smartkarma report said the leveraged funds would require about a 16.5% rise in the underlying chip stocks to return to their June 22 levels after Tuesday's sharp selloff.
2x leveraged ETFs tied to Samsung Electronics and SK Hynix would need to climb about 33% to get back to their June 22 levels, according to a Smartkarma report by derivatives and quantitative strategist Gordenz Schneider. Because the funds are designed to deliver twice the daily move of the underlying shares, that recovery would imply a roughly 16.5% rebound in Samsung Electronics and SK Hynix. The calculation follows a steep Tuesday decline in the chipmakers' stocks, which both fell by double digits and pushed the related ETFs down nearly 25%. The Samsung 2x leveraged ETF has also fallen 5.4% since its May 27 launch, underscoring how leveraged products can magnify losses after sharp market swings.