5% Move in South Korean Stocks Triggers $4.7 Billion of Leveraged ETF Rebalancing
A 5% move in South Korean stocks now triggers roughly $4.7 billion of automatic buying or selling as leveraged ETF dealers rebalance daily to maintain their leverage targets. Those flows equal about 13% of total daily market turnover, while a 5% move in SK Hynix and Samsung Electronics would generate about $2.03 billion and $1.45 billion of forced trading, respectively.
The figures underscore how quickly leverage has expanded in South Korea’s market. Assets under management in South Korea-focused leveraged ETFs have climbed to nearly $40 billion, a record and about 600% higher this year after tripling since March, while the total market value of ETFs listed on the Korea Exchange has reached a record 514.4 trillion won ($339 billion), up more than 70% year to date. Demand for margin loans has also intensified, with multiple internet banks posting notices that daily loan allocations were exhausted at the market open.
From the sources (3 posts)
@globalmktobserv🚨THIS IS ABSOLUTELY CRAZY STUFF: South Korea-focused leveraged ETFs assets under management AUM have surged to nearly $40 billion, an ALL-TIME HIGH. This figure has skyrocketed +600% since the beginning of the year, TRIPLING since March a
@globalmktobserv⚠️South Korean retail leverage trading is SKYROCKETING: The total market cap of ETFs listed on the Korea Exchange surged to a record 514.4 trillion won, or $339 BILLION. This is up more than +70% year-to-date.. TAP IMAGE TO SEE FULL INSI
@globalmktobserv‼️HOLY COW: A 5% move in South Korean stocks now triggers $4.7 BILLION in forced automatic buying or selling. This comes as leveraged ETF dealers must rebalance their positions daily to maintain their leverage targets, meaning every marke