Dropped from 193 to 65 Hong Kong dollars! The twice-long Hynix ETF fell nearly 70% in 12 trading days

Dropped from 193 to 65 Hong Kong dollars! The twice-long Hynix ETF fell nearly 70% in 12 trading days.

In the past half month, the Korean stock market has staged a tragic "leverage stampede." At the same time, the "Twice Long Hynix ETF" and "Twice Long Samsung ETF" that have become popular in the Hong Kong stock market this year ETF” market prices fell by more than 60% from their highest points.

This means that investors who bought these two ETFs in the past two months have suffered losses on their books.

Double long Hynix fell nearly 70% The full name of "Twice Long Hynix ETF" is CSOP Daily Leveraged (2x) Product ETF (Hong Kong Stock Code: 07709), "Twice Long Samsung The full name of "ETF" is CSOP Samsung Daily Leveraged (2x) Product ETF (Hong Kong Stock Code: 07747). Both leveraged ETFs are funded by CSOP Ltd.

(hereinafter referred to as CSOP) issuance management. “Twice as long” means: get as close as possible before deducting fees and expenses Or twice the daily stock price performance of Samsung Electronics, that is to say, for every 1% increase in the stock price, this ETF product will rise close to 2%; for every 1% fall, the ETF will fall close to 2%.

Public information shows that the "Twice Long Hynix ETF" was established in October 2025, and the ETF issuance price is approximately HK$7.8 per unit. Entering 2026, The stock price started to rise, and the market price of the "Twice Long Hynix ETF" also soared.

At the close of trading on January 2, Hong Kong dollar, the fund once hit HK$193.65 during intraday trading on June 25. Based on this calculation, the ETF has increased more than 10 times. The scale of its products has also increased. At the end of last year, the ETF's scale was only US$636 million (approximately HK$4.986 billion).

As of June 30, its asset size has soared to US$13.07 billion (HK$102.462 billion). Recently, SK Hynix’s stock price has experienced a significant correction.

On June 25, the company's stock price reached a maximum of 2.987 million won; it then fell all the way, plummeting 15.37% on July 13, the largest single-day drop; on July 14, it fell more than 8% intraday, and rose sharply in the afternoon, closing at 1.913 million won. However, compared with the high point during the year, the stock price fell 36%.

The decline of "Twice Long Hynix ETF" was even more severe. From a high of HK$193.65, it fell to a closing price of HK$65.2 on July 14, a plunge of more than 66% in just 12 trading days. This means that investors who bought the ETF in the past two months (since May 6) have suffered book losses.

A similar situation occurred with "Twice Long Samsung Electronics ETF". The ETF's closing price on January 2 was HK$38.12, and it once touched HK$243.1 on June 3, an increase of more than 5 times. In the past more than a month, the ETF has been falling. As of July 14, it closed at HK$95.3, down more than 60% from last month's high.

During the trading session on the 14th, the above two products experienced huge fluctuations. The "Twice Long Hynix ETF" once fell by more than 18% during the session and rose 8.85% as of the close; the "Twice Long Samsung Electronics ETF" once fell by more than 7% and rose 6.91% as of the close.

Public information shows that CSOP is an overseas subsidiary of Southern Fund and was established in Hong Kong in 2008. In the first half of 2025, among all Hong Kong leveraged and inverse product managers, CSOP’s total market share exceeded 98.1%. Are leveraged products a “wealth crusher”?

On May 27, 8 Korean The company issued 16 2x leveraged and inverse ETF products based on Samsung Electronics and SK Hynix. These ETF products are "wealth accelerators" when they rise, but become "wealth crushers" when they fall.

According to Bloomberg citing ETF CHECK data from the Korea Exchange and Koscom, as Samsung Electronics' stock price fell 10.7% and SK Hynix's stock price fell 15.37% on July 13 - leveraged products amplified the decline to 22% - 24% (Samsung related) and 31% - 33% (SK Hynix related).

Guo Yiming, investment advisory director of Jufeng Investment Consulting, told Sino-Singapore Jingwei that the direct cause of the collapse of the two ETFs was the sharp correction of the underlying stocks SK Hynix and Samsung Electronics themselves. However, The deeper reason lies in the high concentration and stampede effect of leveraged funds.

“The scale of the 2x leveraged ETF-related products of these two stocks has expanded rapidly in the short term, and almost all leveraged funds are betting in the same direction.

When market sentiment reverses and foreign capital continues to sell net, huge leveraged funds are trampled, and the decline in underlying stocks forces mechanical selling of leveraged ETFs, forming a vicious cycle.

According to Bloomberg, strategists at Nomura Securities estimate that for every 1% market fluctuation, leveraged ETFs will currently generate about $9 billion in demand for position adjustments. Most of these are "mechanical" position adjustments that fund managers must perform to maintain committed leverage.

Guo Yiming further pointed out that this type of ETF uses a daily leverage reset mechanism and does not have the effect of doubling returns in the long term. The fund relies on derivatives tools to only ensure that the rise or fall of a single trading day is twice that of the corresponding underlying stock.

After the closing of each day, the fund will uniformly adjust positions and reset the leverage multiple. Guo Yiming mentioned that this mechanism is only suitable for intraday and ultra-short-term trading. Unilateral market conditions will amplify gains and losses. Market fluctuations will cause continuous compound interest losses.

Long-term returns will seriously deviate from twice the rise and fall of the underlying stocks. The operating logic is essentially different from ordinary unlevered ETFs.

Bloomberg reported that Jung In Yun, CEO of Fibonacci Asset Management, a Korean quantitative asset management institution, said: “The sharp decline of these leveraged ETFs is particularly painful for retail investors because many seem to view them as long-term investments rather than short-term trading tools.

Severe losses in these ETFs may discourage retail investors from buying The willingness and ability of stocks makes market recovery more dependent on foreign capital inflows.

" Korean regulatory measures may be on the way According to Bloomberg citing market news, South Korea’s financial regulatory authorities are launching a comprehensive rectification of single stock leveraged ETFs in the South Korean market and have requested The company submits a remedy plan to curb market volatility.

By the Ministry of Finance and Economy of the Republic of Korea, the Financial Services Commission of Korea, the Republic of Korea A high-level coordination mechanism composed of the Financial Supervisory Service and the Financial Supervisory Service has also intervened.

On July 14, the South Korean Financial Commission held a closed-door meeting with major securities companies and asset management companies to discuss regulatory measures for single stock leveraged ETFs. Potential measures include raising minimum deposit requirements, strengthening pre-investment , Tighten credit and margin trading controls.

Stricter options include lowering leverage, limiting intraday price fluctuations and turnover rates. A meeting of the four major economic departments of the South Korean government is scheduled to be held on July 16 to discuss response measures. Product prices may be more volatile than traditional ETFs.

Additionally, the product is focused on a single underlying stock. Due to its non-diversified and leveraged nature, the price of the Product is extremely volatile and may become unviable in the short term. Investors may lose most or all of their investment in one day.

The company also mentioned that because SK Hynix and Samsung Electronics belong to the technology industry, which is characterized by large price fluctuations, their stock price volatility may be higher than that of companies in other industries. The price volatility of the underlying stock may also be higher than that of other companies.

“The product is not designed to be held for more than one day as the performance of the product over periods longer than one day may deviate from and may not be correlated with the leveraged performance of the underlying stock over the same period.

In addition, The product is designed for short-term trading or hedging and is not suitable for long-term investment. " (

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