According to South Korean media outlet Daum, after South Korea’s financial regulator raised the investment threshold for single-stock leveraged products, Korean retail investors have begun adjusting their overseas portfolios by reducing positions in high-leverage products and shifting toward direct purchases of U.S. equities. Data shows that since the minimum cash margin requirement for single-stock leveraged products was raised to 300 million KRW on August 1, there has been significant outflows from the 2x leveraged Tesla product, TSLL. While Korean investors still net bought approximately $14.58 million worth of TSLL on the 3rd, their purchases dropped sharply to $1.56 million on the 4th, while sales surged to $8.68 million, resulting in a net sale of $7.11 million that day.
South Korean retail investors shift to direct U.S. stock purchases after leverage thresholds are tightened.
TechFlowShare
Summary
South Korean retail investors are moving away from leverage trading after regulators increased the minimum cash margin for single-stock products to 30 million KRW. Effective August 1, this change led to a decline in high-leverage positions and a shift toward direct purchases of U.S. stocks. The Tesla 2x product TSLL experienced a sharp reversal, with net inflows of $14.58 million on August 3 turning into a $7.11 million outflow the following day. The shift reflects a recalibration of the risk-to-reward ratio for retail traders.
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