Samsung Electronics and SK Hynix accounted for 83.1% of Korean stock market trading volume on May 8 when combined with related leveraged ETFs, Korea Exchange reported May 9. The two stocks generated 24.8123 trillion won (51.0% of total KOSPI/KOSDAQ trading of 48.6090 trillion won), up 21 percentage points from May 26, before single-stock leveraged ETFs launched. Adding 16 single-stock leveraged/inverse ETF trading volumes (15.6045 trillion won) brought the total to approximately 40 trillion won. Securities analysts warned the semiconductor trading concentration combined with leveraged products amplifies volatility through short gamma structures forcing automated price-based trading.
Samsung Electronics and SK Hynix Trading Volumes Reach 24.8 Trillion Won on May 8
According to Korea Exchange data released May 9, Samsung Electronics recorded 9.5563 trillion won in trading volume on May 8, while SK Hynix recorded 15.2560 trillion won. The combined 24.8123 trillion won represented 51.0% of the total KOSPI and KOSDAQ trading volume of 48.6090 trillion won. This marked a 21 percentage point increase from May 26, when the two stocks accounted for 30.0% of market trading, immediately before single-stock leveraged and inverse ETFs launched.
When including the 15.6045 trillion won trading volume from 16 single-stock leveraged and inverse ETFs based on Samsung Electronics and SK Hynix, the total trading related to these two stocks approached 40 trillion won. While KOSPI and KOSDAQ trading volumes do not include ETF transactions, making direct comparisons limited, the data confirmed rapid concentration of market capital into semiconductors and related derivative products.
The Korean stock market showed significant volatility tied to the two semiconductor stocks' price movements. On May 7-8, when both stocks fell approximately 6%, the KOSPI declined 4.91% and 5.35% respectively.
Short-Selling Indicator Shows Semiconductor Stock Concentration at 38.9%
The concentration trend became more pronounced in securities lending balances, considered a leading indicator for short selling. Samsung Electronics and SK Hynix accounted for 32.1% of total securities lending balances on May 26, which expanded to 38.9% by May 8. SK Hynix securities lending balances increased by over 5 trillion won, with its share of total securities lending rising from 16.2% to 21.5%.
Leveraged ETFs Execute Daily Rebalancing Through Short Gamma Structure
Securities industry analysts identified structural characteristics of single-stock leveraged ETFs that amplify market volatility. Yoo Myung-gan, researcher at Mirae Asset Securities, stated: "The recent sharp market correction stems more from technical factors originating in the short gamma structure of leveraged ETFs rather than fundamentals. Since leveraged ETFs have a structure of buying when prices rise and selling when they fall, continuous monitoring is necessary in the current phase."
Kim Seok-hwan, researcher at Mirae Asset Securities, explained: "Leveraged ETFs conduct rebalancing just before market close every day to match the daily returns of the underlying index. This process creates artificial short gamma exposure, strengthening forced trading flows based on price fluctuations."
Circuit Breakers Triggered 5 of 8 Times After Leveraged ETF Launch
Analysis indicated market volatility expanded significantly after single-stock leveraged ETF listings. Lee Jae-won, researcher at Yuanta Securities, noted: "In less than a month and a half after single-stock leveraged ETF launch, 16 of 49 sidecar events and 5 of 8 circuit breaker events were triggered. As volatility increases, institutional investors find it difficult to inject new capital due to risk limits and liquidity constraints."
Lee added: "In a market where sidecars and circuit breakers repeat as they do currently, it is difficult to expect large-scale institutional capital inflows based solely on fundamental improvements. Institutional supplementation to reduce market volatility is also necessary."
FAQ
What percentage of Korean stock market trading did Samsung Electronics and SK Hynix account for on May 8?
Samsung Electronics and SK Hynix accounted for 51.0% of total KOSPI and KOSDAQ trading volume on May 8, with combined trading of 24.8123 trillion won out of 48.6090 trillion won total market trading. When including 16 related single-stock leveraged and inverse ETFs (15.6045 trillion won), the proportion reached 83.1% of market trading.
How many circuit breaker events occurred after single-stock leveraged ETF launch?
According to Yuanta Securities researcher Lee Jae-won, in less than a month and a half after single-stock leveraged ETF launch, 16 of 49 sidecar events and 5 of 8 circuit breaker events were triggered, indicating increased market volatility concentration in the semiconductor sector.
Why do leveraged ETFs amplify market volatility according to analysts?
Mirae Asset Securities researchers explained that leveraged ETFs conduct daily rebalancing before market close to match underlying index returns, creating artificial short gamma exposure. This structure forces buying when prices rise and selling when prices fall, strengthening automated trading flows based on price movements rather than fundamentals.
