South Korean leverage ETF trading volume drops 75% on first day of regulatory restrictions

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South Korean leverage ETF trading volume plunged 75.3% on the first day of regulatory restrictions, according to Odaily. Korea Exchange data shows the total transaction volume for 16 stock leverage and inverse ETFs fell to 33.071 billion KRW, down from 124.485 billion KRW the previous day. Transaction volume for 14 major stock leverage ETFs (excluding inverse products) also dropped 64.4% to 24.686 billion KRW, compared to 69.354 billion KRW the day before.

Odaily Planet Daily reports that, on the first day of South Korea’s financial regulators implementing restrictions on individual stock leveraged ETFs, trading volumes for these products plummeted to one-quarter of the previous day’s level. According to trading data from the Korea Exchange (KRX), total trading volume for the 16 individual stock leveraged and inverse ETFs on the first day of the new rules amounted to KRW 330.71 billion—down 75.3% from KRW 1.24485 trillion the previous day. Compared to the daily average trading volume of KRW 1.227 trillion in July, the financial regulators’ stringent measures have clearly and immediately curbed capital flows.

Excluding inverse products, the trading volume of the 14 major individual stock leveraged ETFs also declined by 64.4%, dropping from KRW 693.54 billion the previous day to KRW 246.86 billion.

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