Following the government's increase of the basic deposit requirement for single-stock leverage exchange-traded funds (ETFs) to 30 million won, trading volumes for Samsung Electronics and SK Hynix leverage ETFs have decreased by more than 50%. Analysts suggest that the new regulations aimed at curbing investment speculation have effectively dampened short-term trading.
According to the Korea Exchange on August 3, the trading volume for 14 types of single-stock leverage ETFs based on Samsung Electronics and SK Hynix was recorded at 112,418,178 shares. This marks a 53.5% decline from the previous trading day on July 31, when the volume was 241,927,900 shares.
The decline in trading volume for key products was significant. The 'KODEX SK Hynix Single Stock Leverage' ETF saw a drop from 116,923,503 shares to 44,387,596 shares, a decrease of 62.0%. Similarly, the 'KODEX Samsung Electronics Single Stock Leverage' ETF fell from 43,311,691 shares to 21,305,981 shares, a reduction of 50.8%.
The 'TIGER SK Hynix Single Stock Leverage' ETF decreased from 53,364,914 shares to 35,988,627 shares, a 32.6% drop, while the 'TIGER Samsung Electronics Single Stock Leverage' ETF fell from 20,607,747 shares to 8,841,049 shares, a 57.1% decline.
To mitigate excessive investment in single-stock leverage ETFs, the government implemented a policy on July 31 to raise the basic deposit requirement from 10 million won to 30 million won. Additionally, the basic deposit is now recognized only in cash, excluding stocks, ETFs, and bonds. Therefore, if an investor deposits 30 million won and purchases 20 million won worth of single-stock leverage ETFs, they must deposit an additional 20 million won in cash for further purchases. However, there are no restrictions on selling existing holdings.
* This article has been translated by AI.
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