According to data released by the Korea Exchange (KRX) on July 9, on July 8, the trading value of Samsung Electronics and SK hynix shares reached 9.5563 trillion won and 15.2560 trillion won, respectively, for a combined total of 24.8123 trillion won. Adding 16 single-leveraged and inverse ETFs that track Samsung Electronics and SK hynix as underlying assets, the trading scale is close to 40 trillion won, accounting for 44.1% of the total trading value in the Korean market.
Samsung Electronics and SK hynix stock trading value combined on July 8: 24.8123 trillion won
According to data released by the Korea Exchange (KRX) on July 9, the following are figures related to market concentration on July 8:
Samsung Electronics trading value: 9.5563 trillion won
SK hynix trading value: 15.2560 trillion won
Combined for the two: 24.8123 trillion won (accounting for 51.0% of the total trading value of 48.6090 trillion won for KOSPI + KOSDAQ)
Share as of May 26 (before the listing of the single-leverage ETF): 30.0% (the gap between the two is 21 percentage points)
Trading value of 16 related single-leverage and inverse ETFs: 15.6045 trillion won
Market share including ETFs: 44.1% of South Korea’s total domestic market trading value (91.6314 trillion won)
Both stocks fell by about 6% on July 7–8
According to reports, on July 7 and 8, Samsung Electronics and SK hynix fell almost simultaneously by about 6%, while KOSPI fell 4.91% and 5.35%, respectively. In terms of securities lending (regarded as a leading indicator for short-selling), SK hynix’s outstanding lending balance increased by more than 5 trillion won; its share of total securities lending rose from 16.2% on May 26 to 21.5% on July 8. The combined share of outstanding lending balances for Samsung Electronics and SK hynix increased from 32.1% to 38.9%.
Analyst warning: Daily rebalancing of leveraged ETFs creates an artificial short gamma exposure
According to reports, Mirae Asset Securities researcher Kim Seok-hwan said: “Leveraged ETFs rebalance every day before the market close to match the daily return of the underlying index; this process artificially creates a short gamma exposure, thereby reinforcing forced trading flows that respond to price volatility.” Mirae Asset Securities researcher Yoo Myung-geun also said: “The recent sharp pullback in the market has been driven more by technical factors stemming from the short-term gamma structure of leveraged ETFs, rather than fundamental factors.”
Lee Jae-won, an analyst at Daishin Securities, pointed out that since the launch of single-stock leveraged ETFs was less than a month and a half ago, among 49 ETFs, 16 have triggered sidecar mechanisms and 5 out of 8 have triggered circuit-breaker mechanisms. He also noted that institutional safeguard measures are needed to reduce market volatility.
Frequently Asked Questions
How much of South Korea’s stock market trading value do Samsung Electronics and SK hynix account for?
Based on KRX data for July 9, on July 8, the combined trading value of Samsung Electronics and SK hynix totaled 24.8123 trillion won, accounting for 51.0% of the combined total trading value of KOSPI and KOSDAQ—up by 21 percentage points from 30.0% on May 26 (before the listing of leveraged ETFs).
How do single-stock leveraged ETFs intensify market volatility?
According to explanations from analysts, leveraged ETFs rebalance every day before the market close to match the underlying index’s daily return; this process creates an artificial short gamma exposure. When the market falls, it generates forced sell orders, and when the market rises, it adds purchases—thereby strengthening and amplifying the existing price volatility.
After the listing of single-stock leveraged ETFs, how many have already triggered sidecar mechanisms?
According to Lee Jae-won, an analyst at Daishin Securities, in less than a month and a half after the listing of single-stock leveraged ETFs, among 49 ETFs, 16 have triggered sidecar mechanisms, and among 8, 5 have triggered circuit-breaker mechanisms. This reflects a significant expansion in market volatility.
