Korean retail investors shift from single-stock leverage to overseas and index products

  • Korean individuals net-sold 1.773 trillion won across 16 Samsung Electronics and SK hynix leveraged products.
  • The products’ combined net assets reached 5.853 trillion won on July 30.
  • Financial regulators introduced simulated trading and plan 20-share minimum trading units by November.

Korean retail investors net-sold 1.773 trillion won (about $1.3 billion) of 16 leveraged and inverse products linked to Samsung Electronics and SK Hynix between July 31 and August 28, reversing 15.3876 trillion won of net purchases since their May 27 debut. The shift followed regulators’ decision to raise the minimum deposit requirement for single-stock leveraged products to 30 million won from 10 million won. Average daily trading volume then fell to 1.0059 trillion won in August, about 8% of the pre-regulation level of 11.6787 trillion won, while demand remained strong for domestic index products and overseas leveraged funds, including QLD and SOXL. Investors have also been required to complete simulated trading since August 19, and a rule expanding the minimum trading unit to 20 shares is scheduled to take effect by November.

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