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Volatility of Seoul Stock Index Drops After Curbs on Leveraged ETFs
Forced liquidations and tighter rules have cut margin debt and trading in leveraged funds tied to Samsung Electronics and SK Hynix, Morgan Stanley said.
- South Korea's VKOSPI 'fear gauge' fell below 70 on Monday, marking the first time since May 28 as authorities curbed 16 single-stock leveraged ETFs blamed for recent market volatility.
- On July 31, financial authorities raised the minimum cash deposit for single-stock leveraged ETFs to 30 million won from 10 million won, triggering the stabilization by curbing speculative retail trading.
- Outstanding margin loans slid to 27.4 trillion won on August 4, the lowest level in 2026, as the stock slump forced liquidations for many retail investors who had been lured by market rallies.
- Foreign investors offloaded $4.3 billion in Korean equities in August, yet Maxence Visseau, chief investment officer of Arkevium Capital, said "a few calmer trading days will not be enough" for confidence to return.
- Goldman Sachs Group Inc. reiterated a 12-month Kospi target of 12,000, representing about 90% upside from Friday's close, with chief Asia Pacific equity strategist Timothy Moe arguing fundamentals remain attractive.
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11 Articles
11 Articles
Korea Volatility Spike Ebbs as Leveraged Trades Are Flushed Out
·New York, United States
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Bloomberg analyzed that volatility in the South Korean stock market may have entered a calming phase due to the reduction of leverage positions and tightened regulations by authorities. According to Bloomberg on the 9th, the KOSPI 200 Volatility Index (VKOSPI), which reflects market anxiety, surged to 97.99 during trading on June 29, marking its highest level since the 2008 global financial crisis. The index continued to... until the end of last…
(Seoul = Yonhap News) Reporter Hwang Cheol-hwan = Over the past week, the volatility in the domestic stock market, which had soared to unprecedented levels, appeared to have eased somewhat.
·Seoul, Korea (the Republic of)
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Coverage Details
Total News Sources11
Leaning Left1Leaning Right4Center2Last UpdatedBias Distribution57% Right
Bias Distribution
- 57% of the sources lean Right
57% Right
14%
C 29%
R 57%
Factuality
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