The Bank of Korea has called for tighter monitoring of overseas derivatives linked to South Korean chipmakers, saying their rapid growth could magnify swings in the domestic market. In its semiannual monetary policy report submitted to the National Assembly on Thursday, the central bank said the KOSPI’s unprecedented volatility from January to July was driven by a heavy concentration in semiconductor stocks, portfolio rebalancing by foreign investors, and the buildup and unwinding of domestic leverage. It also pointed to leveraged bets by Situational Awareness as a recent example. According to the report, global banks and ETF managers hedging total return swaps traded Korean cash equities, futures, and options, which appeared to amplify local stock-price moves. While the Bank of Korea did not cite a specific case, it said an unusual trade in SK hynix in July triggered nearly $60 million in liquidations in the offshore digital-asset market, highlighting rising cross-market risks tied to leveraged products linked to South Korean chipmakers.
Odaily reported that the Bank of Korea has called for stronger monitoring of overseas derivatives tied to South Korean chipmakers, warning that the fast growth of those products could amplify volatility in the domestic market.
In its semiannual monetary policy report submitted to the National Assembly on Thursday, the central bank said the KOSPI’s unprecedented swings from January to July were driven by a concentration in semiconductor stocks, portfolio rebalancing by foreign investors, and the buildup and unwinding of domestic leverage.
The Bank of Korea said leveraged bets by Situational Awareness were a recent example. It also said global banks and ETF managers hedging total return swaps traded Korean spot stocks, futures, and options, which apparently intensified domestic share-price volatility.
Although the central bank did not cite a specific case, an unusual trade in SK hynix in July triggered nearly $60 million in liquidations in the offshore digital-currency market, highlighting rising cross-market risks from leveraged products linked to South Korean chipmakers.
This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan. Disclaimer:
The market information, project data, and third-party content displayed on this platform are for industry information sharing only and do not constitute any form of investment advice or return commitment.
Cryptocurrency trading carries high risks. Users should fully assess their risk tolerance and make independent decisions. All profits, losses, and legal responsibilities are borne by the users themselves.
