Day Traders Are Abandoning Korean Chip Leveraged ETFs in Droves
An onerous mock trading course is becoming an effective tool for South Korea to cool investor fervor over risky products that have turned the country’s $4.3 trillion stock market extremely volatile.
South Korean retail investors are rapidly pulling out of leveraged exchange-traded funds tied to Samsung Electronics and SK Hynix. According to Investing.com, trading activity in these ETFs has significantly collapsed, with trading value now at just 4% of its June peak.
The outflows from these ETFs have been substantial, with around $1 billion withdrawn so far in August, which could lead to the first monthly outflow. This decline in investment comes after regulators introduced tougher requirements, including a mandatory five-day simulated trading course that investors must complete before accessing these products.
The course, which requires investors to download a Windows-only program and trade with virtual funds for at least an hour each day, was introduced on August 19. Bloomberg notes that this and other measures aim to cool speculative activity that had caused sharp swings in South Korea's $4.3 trillion stock market. Assets in the leveraged ETFs have dropped to about $5 billion as of August 27, down from $11.4 billion in late June.
Brief written by urgent.news from Bloomberg, Investing.com — 2 reports on this story. Machine-written — may contain errors; check the original before relying on it.
