A leveraged SK Hynix ETF in Hong Kong has grown into a market-moving force: the CSOP SK Hynix Daily 2x Leveraged ETF has ballooned to $13 billion in just nine months since its launch, becoming the largest single-stock leveraged ETF of its kind globally. In comparison, leveraged ETFs tracking Micron, Nvidia, SanDisk, and Tesla have a combined assets under management (AUM) of less than $10 billion. This $13 billion size is now roughly twice SK Hynix's average daily trading volume this year, the most significant disparity among major stocks with leveraged ETFs.
On volatile trading days, this ETF and its smaller counterparts can account for approximately 66% of SK Hynix's total trading volume—a staggering figure for a company with a market capitalization of $1.2 trillion. SK Hynix and Samsung together account for 57% of the weighting in the Korea Composite Stock Price Index (KOSPI), with SK Hynix alone accounting for 28%, meaning that the volatility of a single ETF can significantly impact the entire benchmark index.
The ETF plunged 25% on Thursday, triggering a forced sell-off that accelerated volatility in stocks and the wider market. It sounds unbelievable that a single leveraged ETF can now influence the entire market.
