Leveraged Product Forced to Sell 2 Million SK Hynix Shares, Exacerbating South Korean Market Sell-Off

Huo Xing Cai Jing reports that on June 7, leveraged products researcher degentrading stated that the leveraged fund Southern 2x Long SK Hynix (7709.HK), listed in Hong Kong, is required to forcibly sell approximately 2 million shares of SK Hynix when the Korean market opens on Monday, following a sharp decline in SK Hynix’s stock price last week. This sell order represents 40% of SK Hynix’s typical daily trading volume and will generate substantial, mechanical selling pressure. Compounding the issue, the gamma effect of leveraged products will cause increased selling as prices fall further, potentially triggering a chain reaction. degentrading believes the Korean stock market will face intense downward pressure on Monday and boldly predicts that EWY (iShares Korea ETF) could drop to $145 after U.S. markets open on Monday (current price: $175). degentrading acknowledges this prediction is “perhaps a bit crazy,” but the core logic is that passive rebalancing sell orders 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 equity market—particularly focusing on the amplification effects and liquidation risks posed by leveraged instruments such as Southern 2x Long SK Hynix (7709.HK).