Leverage Shares analyst Sandeep Rao says leveraged ETFs linked to SK Hynix and
their hedging flows now account for roughly 60-70% of the chipmaker's trading
volume. The surge in leveraged ETF issuance has driven large derivatives
activity and hedging, shifting demand from direct stock purchases into leveraged
products. With SK Hynix shares up about 780% over the past year, options volumes
have swelled and some market participants say flow dynamics may be as important
as company fundamentals. Rao adds that inflows are increasingly coming from
leveraged ETFs rather than interest in the underlying cash stock, effectively
leaving cash equity trading dominated by leveraged ETF-related flows.
