14 hrs ago
Korean Investors Lose $1.7 Billion on Leveraged Chip Bets
Some investors in South Korea bought products that rise and fall more sharply than the shares they follow.
These products were tied to chipmakers Samsung Electronics and SK Hynix.
A lawmaker’s office said investors lost about 2.3 trillion won, or $1.7 billion, over a period from May 27 to Aug.
14.
The estimate covered customers at 10 brokerages.
The products had been introduced in May.
They can make gains bigger when prices rise, but losses bigger when prices fall.
Since July, authorities have paused new listings and added rules for investors.
The trading had added to swings in a market closely tied to the AI industry.
Retail investors lost an estimated 2.3 trillion won, or about $1.7 billion, on leveraged products tied to Samsung Electronics and SK Hynix.
The losses covered the period from May 27 to Aug. 14 and involved clients of 10 Korean brokerages.
The figures came from the Financial Supervisory Service and were disclosed by opposition lawmaker Choi Eun-seok’s office.
Since July, authorities have temporarily stopped new listings of leveraged single-stock products and introduced higher cash-deposit and investor-training requirements.
The products can magnify gains and losses; regulators’ measures followed volatile trading in South Korea’s AI-focused stock market.
- Who
- Retail clients of 10 Korean brokerages, investing in products tied to Samsung Electronics and SK Hynix.
- What
- They incurred estimated losses of 2.3 trillion won, or about $1.7 billion, from leveraged single-stock ETFs and notes.
- Where
- South Korea.
- When
- The reported losses occurred between May 27 and Aug. 14; authorities introduced measures starting in July.
- Why
- The leveraged products amplify market moves, and prices swung in a market heavily exposed to AI-industry cycles.
Key facts
- Estimated losses
- 2.3 trillion won, about $1.7 billion
- Loss period
- May 27 to Aug. 14
- Brokerages covered
- 10
- Stocks tracked
- Samsung Electronics and SK Hynix
- Products
- Leveraged single-stock ETFs and notes
- Regulatory measures
- Temporary halt on new listings, higher minimum cash deposits, and investor training requirements
- Source of figures
- Financial Supervisory Service data disclosed by Choi Eun-seok’s office
Sources
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