The market for single-stock leveraged ETFs based on Samsung Electronics and SK Hynix, which once saw daily trading volumes exceeding 11 trillion won, has shrunk to the 1 trillion won range within a month. After the implementation of a 30 million won minimum deposit requirement, over 90% of trading volume evaporated, and it further dropped below 900 billion won following the addition of a simulated trading obligation.
According to the Korea Exchange, it will be one month (four weeks) since the minimum deposit for single-stock leveraged products was strengthened to 30 million won in cash on the 28th. An analysis by Electronics Times of 16 single-stock leveraged and inverse ETFs based on Samsung Electronics and SK Hynix showed that the average daily trading volume from the listing date (May 27) to July 30 (the day before the deposit increase) was 11.6787 trillion won.
Trading volumes sharply declined after the 30 million won minimum deposit requirement took effect. From August 31 to September 25 (17 trading days), the average daily trading volume was 1.069 trillion won—a 90.8% decrease compared to before the regulation.
Since September 19, when the simulated trading requirement was added for individual investors, trading volumes have decreased further. Investors must complete at least five hours of simulated trading (one hour per trading day over at least five trading days) before purchasing actual products. Those with prior trading experience in single-stock leveraged products are exempt.
From September 19 to 25 (five trading days), the average daily trading volume was 891.5 billion won—a 22% decrease from the period when only the 30 million won deposit was applied. Compared to before the 30 million won threshold, this represents a 92.4% reduction.
The decline was even more pronounced compared to the peak of the single-stock leveraged market. On June 24, when daily trading volume hit its highest at 19.4429 trillion won, the average daily volume after the deposit increase marked a 94.5% drop.
The 16 single-stock leveraged ETFs were first listed on May 27. On the listing day alone, 10.418 trillion won was traded. Monthly average daily trading volumes also grew rapidly, recording 11.4251 trillion won in June and 11.8589 trillion won in July.
Financial authorities announced supplementary measures on August 16 as concerns over market overheating and volatility grew. They temporarily halted new product listings and promotional marketing events, and raised the minimum deposit for individual general investors from 10 million won to 30 million won starting August 31.
Lee Hyo-seop, a senior researcher at the Capital Market Institute, stated, “Applying relatively high regulations to specific products could lead to a balloon effect, where demand shifts to other domestic or international leveraged products. A consistent regulatory framework should be established in the long term.”
