BlockBeats News, August 7th. A week after the implementation of regulatory measures on single-stock leveraged and inverse ETFs in South Korea, the trading heat of related products has significantly cooled down, with two consecutive trading days seeing a trading volume of less than 1 trillion Korean won. Data from the Korea Exchange (KRX) shows that on August 7th, the total trading volume of 16 single-stock leveraged and inverse ETFs in the South Korean market was 941.2 billion Korean won, following the 919.8 billion Korean won from the previous trading day, marking the second consecutive day below 1 trillion Korean won.

The market believes that the decline in trading volume is mainly due to the new regulatory measures implemented starting on July 31st. The new rules have raised the fund threshold for individual retail investors to participate in single-stock leveraged ETFs, increasing the initial margin requirement from 10 million Korean won to a cash amount of 30 million Korean won.

However, South Korean securities firms have pointed out that the investment demand has not completely disappeared but has shifted to "regulatory arbitrage" or the "balloon effect" towards semiconductor leveraged ETFs and overseas-listed leveraged products.

South Korean investment securities researcher Jung Hyun-jong stated that after the implementation of regulations, the trading volume of individual stock leveraged ETFs declined, but the trading volume of semiconductor leveraged ETFs instead increased, indicating that some funds are shifting to alternative products, with overseas market-related products also possibly becoming the target of fund flows. Jung Hyun-jong pointed out that due to the lack of domestic regulatory constraints on overseas-listed ETFs, investors may turn to overseas single-stock leveraged ETFs. Among them, the CSOP SK Hynix Daily (2x) Leveraged Product listed in Hong Kong is currently one of the largest products in the global single-stock leveraged ETF market. Relying solely on South Korean domestic regulatory measures, it is challenging to completely suppress investors' demand for the semiconductor cycle and high-leverage strategies. The long-term regulatory impact still requires continuous observation. (Daum)