Regulators warned that single-stock leveraged and inverse products tied to Samsung Electronics and SK Hynix, rising margin balances and heavy retail inflows could fuel speculation as the equity market climbs.
South Korean regulators are warning about rising speculation as leveraged ETF assets have tripled to $9.1 billion and new single-stock leveraged and inverse products tied to Samsung Electronics and SK Hynix expand retail access to amplified bets. The funds, approved in April, are considered risky enough that prospective buyers must complete hours of instruction and pass an eight-question exam. Authorities’ concerns extend beyond the ETF segment to swelling margin balances, crowded trades, fresh investor inflows and a pipeline of large initial public offerings, and officials also discussed possible steps to cool excess risk-taking, including taxing unrealized stock gains.