BlockBeats news, on June 7, leveraged products researcher degentrading stated that the leveraged fund Southern 2x Long SK Hynix (7709.HK), listed in Hong Kong, must forcibly sell approximately 2 million shares when the Korean market opens on Monday due to a significant drop in SK Hynix’s stock price last week. This sell order volume equals 40% of SK Hynix’s normal daily trading volume and will create substantial, mechanical selling pressure. Compounding the issue, the gamma effect of leveraged products will cause more selling as the price falls, potentially triggering a chain reaction.
degentrading believes that the Korean stock market will face strong downward pressure on Monday, boldly predicting that EWY (iShares Korea ETF) could drop to $145 after the U.S. market opens on Monday (current price: $175). degentrading acknowledges that this prediction "might be a bit crazy," but the core logic is that passive rebalancing sell-offs from leveraged products will dominate the market, leading to a sharply bearish outlook in the short term for Korea’s semiconductor sector and the broader stock market, with particular attention to the amplified effects and liquidation risks from leveraged instruments such as the 2x Long SK Hynix (7709.HK).