Samsung, SK Hynix Leveraged ETFs to Debut Next Month

Leveraged Exchange-Traded Fund (ETF) products that track the stock price fluctuations of Samsung Electronics and SK Hynix at twice the rate will be listed on the stock market starting next month. These products offer double the profit when Samsung Electronics and SK Hynix stock prices rise, but conversely, the losses also double when stock prices fall.

The Financial Services Commission announced on the 21st that an amendment to the Enforcement Decree of the Capital Markets Act, which permits the introduction of leveraged ETFs based on single stocks, has passed the Cabinet meeting. Samsung Electronics and SK Hynix meet the criteria for blue-chip stocks with an average market capitalization share of over 10% and an average trading value share of over 5%, allowing them to be used as underlying assets.

It is anticipated that over 10 types of leveraged ETFs based on these stocks will be traded next month. Domestically, trading of ETFs based on a single stock has been restricted.

Leveraged ETFs for single stocks carry high volatility and risk of loss, so their product characteristics will be clearly indicated. In addition to the existing one-hour preliminary education, investors will be required to complete an additional one-hour advanced training course.