Svmuu News: SK Hynix’s record-breaking U.S. IPO has spurred a new wave of leveraged products linked to the stock to hit Wall Street. Issuers such as ProShares, Leverage Shares, and Rex Shares are preparing to launch products that offer a two-fold long position on SK Hynix ADRs, while some are also preparing inverse products.According to information on the issuers’ websites, at least six products are set to launch next week. SK Hynix leveraged ETFs are extremely popular in the South Korean market.
SK Hynix, Samsung Electronics, and their associated leveraged products collectively account for more than 70% of trading volume on the South Korean stock market, exacerbating volatility in the KOSPI index. JPMorgan Chase John Cho, a South Korean equity fund manager at Asset Management, said, “Some elements of retail investor activity appear to be increasingly momentum-driven, and the growth of single-stock ETFs has amplified trading volume and volatility in large-cap stocks. The emergence of leveraged ETFs is not a healthy sign and may signal late-cycle retail behavior.”” Analysts noted that the concentration of single-stock leveraged products has begun to affect the stocks they are designed to track. A new batch of U.S.-listed leveraged ETPs means that daily rebalancing capital flows will expand, potentially exacerbating already high volatility. (Jin Shi)