Is the single leverage transaction amount, which 'plummeted after strengthening regulations,' on the rise again?

Single-stock leverage trading revenues are again on the rise after being sharply reduced due to regulatory tightening. According to the Korea Exchange and Cosco, the combined trading revenue of 16 single-stock leverage contracts, including inverse contracts, reached 8,447 billion won as of the previous trading day on the 14th. This figure plummeted to 3,148.5 billion won on the 30th, right before the regulatory measures took effect, and then continued to drop to 592.3 billion won on the 11th, 7,472 billion won on the 12th, 8,608 billion won on the 13th, and finally settled at 8 trillion won.

Prior to the regulatory change, the basic margin for single-stock leverage was increased from 100 million to 300 million won on the 31st. The surge in single-stock leverage trading revenues is more likely due to the reversal of investor sentiment, rather than an increase in trading activity, particularly as semiconductor stocks rebounded.

For individual investors, SK Hyosung and Samsung Electronics single-stock leverage contracts accounted for 2,633 billion won and 2,248 billion won, respectively, with both selling off. Adding these amounts together yields a total of 4,881 billion won. Foreign investors also showed a preference, with SK Hyosung and Samsung Electronics single-stock leverage contracts experiencing 2,462 billion won and 471 billion won in sales, respectively.

The decline in investor sentiment can be attributed to the fact that SK Hyosung and Samsung Electronics stocks rebounded from November 11th to 14th, with four consecutive days of price increases. Starting from the 19th, the threshold for entering single-stock leverage will increase, which may lead to further contraction in investor sentiment.

The government plans to strengthen the basis management standard for ETFs and ETNs starting the 19th, as well as make it mandatory for investors to use mock trading when investing in single-stock leverage products, including inverse products. Investors can experience a simulated environment where virtual funds are paid out on the Korea Exchange's homepage and traded in real-time at current market prices.