According to data from the Korea Securities Depository, South Korea’s financial regulator increased the initial margin requirement for single-stock leveraged products, both domestic and foreign, from KRW 10 million to KRW 30 million in cash, effective July 31. On August 4, the 2x leveraged Tesla product (TSLL) shifted to a net short position of $7.11 million, while net spot purchases of Tesla reached $42.3 million during the same period. The 2x leveraged Micron Technology product switched from a net long position of $10.81 million on the 3rd to a net short position of $15.98 million on the 4th, with net spot inflows into Micron reaching $148 million during the same period. The 2x leveraged SanDisk product moved from a net long position of $17.74 million to a net short position of $33.74 million, while net spot inflows into SanDisk totaled $145 million during the same period.
South Korea Increases Margin Requirements for Leveraged Products as Retail Investors Shift to Spot Trading
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Summary
South Korea increased margin requirements for leveraged products, impacting retail investor behavior. The minimum cash margin for single-stock leveraged products rose to 30 million KRW effective July 31. On August 4, Tesla’s 2x leveraged product, TSLL, recorded a $7.11 million net sell, while spot buying reached $42.3 million. Micron’s 2x leveraged product shifted from a $10.81 million net buy to a $15.98 million net sell, with $148 million in spot inflows. SanDisk’s 2x leveraged product also experienced a reversal, accompanied by $145 million in spot inflows. Traders are adjusting their risk-to-reward ratios and exploring spot grid strategies as a more stable alternative.
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