According to BlockBeats, on August 3, following South Korea's increase in margin requirements for single-stock leveraged ETF investors, trading activity for these products significantly declined, with trading volume dropping to about one-tenth of its previous peak level.
According to data from Korean exchanges, the total trading volume of 16 single-stock leveraged and inverse ETFs linked to Samsung Electronics and SK Hynix dropped by 58.6% over the two trading days following the implementation of new measures, reaching KRW 123.88 billion compared to KRW 299.07 billion on the day the measures took effect, July 31.
Previously, South Korean regulators raised the minimum cash margin requirement for single-stock leveraged ETF investors from KRW 10 million to KRW 30 million. Compared to the trading volume of KRW 1.24485 trillion on the last trading day before the measure took effect (July 30), the trading volume of these products has now declined to approximately one-tenth.
The decline in retail investor enthusiasm has been particularly pronounced. Data shows that trading volume in retail investors' leveraged and inverse single-stock products dropped to KRW 250.7 billion, less than a quarter of the KRW 929.9 billion recorded on July 31.
Analysts say that raising the margin requirement has initially curbed speculative capital inflows, and the trading pattern of retail investors continuously buying leveraged products during declines in underlying stocks is changing.