South Korean Retail Investors Turn to Selling Samsung Electronics and SK Hynix After Leveraged Product Regulation Tightening, Net Selling About 1.8 Trillion KRW in Past Month

Data from the Korea Exchange shows that after the minimum margin for single-stock leveraged and inverse products was raised from 10 million KRW to 30 million KRW on July 31, South Korean individual investors had cumulatively net sold 1.773 trillion KRW across 16 single-stock leveraged and inverse products related to Samsung Electronics and SK Hynix as of August 28. In contrast, from the listing of these products on May 27 to July 30, individual investors had cumulatively net bought 1.529 trillion KRW. During the same period, retail investors' trading direction in Samsung Electronics and SK Hynix also reversed: previously net buying 5.352 trillion KRW and 9.937 trillion KRW respectively, they shifted to net selling 531.6 billion KRW and 1.242 trillion KRW respectively after July 31.

Trading activity in the related products also declined significantly following the regulatory adjustment. The average daily trading volume of the 16 products fell from 11.679 trillion KRW to 958 billion KRW, a drop of approximately 91.8%; the share of individual investor trading fell from 34.5% to 27.1%.

[TechFlow]