Refund my money, I'm done! Korean retail investors leveraged bets on SK Hynix and Samsung suffer heavy losses, with a single leveraged ETF down 70% from its peak.

Refund my money, I'm done! Korean retail investors leveraged bets on SK Hynix and Samsung suffer heavy losses, with a single leveraged ETF down 70% from its peak.

South Korean retail investors have been aggressively leveraging bets on domestic tech giants amidst the AI chip craze, and now they are suffering heavy losses, with the cost of this gamble becoming increasingly apparent.

The most severe losses have been incurred by holders of single-stock leveraged ETFs linked to SK Hynix and Samsung Electronics. According to LSEG data, KODEX SK Hynix single-stock leveraged ETF has dropped around 70% since its peak in June, and has fallen about 50% since its first day of listing. According to CNBC, after SK Hynix's record one-day plunge last week, South Korea's major online investment forums were filled with lament. One investor commented, "I want to go back to before I started trading stocks and get my money back." Another investor wrote, "You are determined to ruin me."

This wave of losses has exposed the amplifying effect of Korea’s retail investor speculation culture on volatility in tech blue chips. Regulators have acted swiftly—South Korean authorities announced on Thursday tighter rules for single-stock leveraged ETFs, raising the minimum entry margin for investors from about 30,000 won to 300,000 won. Meanwhile, some seasoned market participants warn that this round of deleveraging may not be over.

Retail Investors Dominate Buying; Losses Concentrated Among South Korean Individuals

According to KB Financial Group, since single-stock leveraged ETFs were listed in Korea on May 27, South Korean retail investors have made net purchases totaling 14 trillion won (about $9.4 billion), while foreign investors’ net purchases were only about 2 trillion won. This huge disparity means nearly all losses from the recent downturn are borne by domestic individual investors.

"The investors bearing the losses are overwhelmingly domestic retail investors," said Jung In Yun, founder of Fibonacci Asset Management.

It is noteworthy that these buyers are not merely novice retail investors. Jung In Yun pointed out that many are middle-aged investors in their 40s and 50s, who have become increasingly accustomed to leverage and concentrated bets on tech stocks, not merely internet-driven beginners.

Some seasoned market participants are more pessimistic about the future. Great Hill Capital's chairman and managing partner, Thomas J. Hayes, noted that storage chip stocks have become the most crowded trades for both institutions and retail investors.

"Semiconductors and storage are the most crowded trades globally among institutions and retail positions—that’s over," Hayes said.

He expects aside from Meta, one or more hyperscale cloud computing companies will lower capex guidance in their Q2 earnings, and when that happens, money will exit semiconductor and storage sectors as aggressively as it flooded in.

Analysts generally believe the long-term fundamentals for storage chip makers remain sound, but the continuing unwind of leveraged positions will pressure Korean tech stocks in the short term.

Leveraged ETF Assets Surge Rapidly, Central Bank Issues Warning

The expansion of leveraged ETFs in Korea is also alarming. According to Oxford Economics, the top 25 Korean leveraged ETFs now account for about 30% of thematic funds in Korea, up from about 15% at the start of 2026—doubling in six months.

Last month, Korea’s central bank issued a report warning that retail leveraged stock trading has reached a historic high, driven mainly by margin loans, with positions highly concentrated in semiconductors.

The central bank stated that while the current risk accumulation is unlikely to pose a systemic threat to the financial system, it warned that, should the market correct, leverage would greatly amplify volatility—especially when “fear of missing out” (FOMO) motivates investors to borrow money and chase gains.

Oxford Economics downgraded its South Korean stock rating to neutral at the end of June, citing high leverage accumulation and the possibility that brokers increasingly may not want to further extend credit lines to retail investors.

Faced with extreme market volatility, Korean regulators have taken action. Authorities announced stricter rules for single-stock leveraged ETFs:

Investors must deposit a minimum of 300,000 won cash margin to trade these products, a tenfold increase over the previous threshold of about 30,000 won. This move aims to curb speculative retail trading and prevent dramatic swings in stocks like Samsung Electronics and SK Hynix from further impacting leveraged products.

Peter Kim, global investment strategy chief at KB Financial Group, said the losses highlight how single-stock leveraged ETFs have become speculative tools, not vehicles for long-term investment.

"There’s no sign yet that Korean retail investors are exiting the market en masse, but if ETF pressure, declines and volatility continue, it could lead to prolonged market stagnation."

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