The CSOP SK Hynix Daily (2x) Leveraged Product (07709) plummeted 15.00% during Thursday's intraday session.
The sharp decline followed a nearly 8% drop in the price of its underlying asset, SK Hynix shares, amid a broader sell-off in South Korean equities. The leveraged ETF, which seeks to deliver twice the daily return of SK Hynix, was directly impacted by the fall in the chipmaker's stock price.
Market analysts point to the ETF's massive scale and the crowded nature of the trade as amplifying the downward move. The fund, with approximately $13 billion in assets, can account for a significant portion of daily trading in SK Hynix shares. Rising hedging costs for the product's counterparties and concerns over potential forced selling in a declining market have increased systemic strain, contributing to the volatility observed in the leveraged product.