SK Hynix shares plunged more than 12% today, dragging down the Southern Double-Long Hynix ETF, a leveraged product issued by CSOP. On-chain analyst Ai Yi posted on X that the ETF, which debuted in October 2025, has gained over 10 times this year, with assets under management nearing $17 billion. The ETF tracks twice the daily performance of SK Hynix shares.
Under the ETF's rebalancing mechanism, a 5% move in SK Hynix would require a $1.7 billion adjustment to its portfolio. SK Hynix recorded a trading volume of $11.2 billion yesterday, providing ample liquidity. South Korean financial regulators said they are considering separate measures for such leveraged ETFs, though details have yet to be disclosed.
The ETF's share price fell today amid the slump in SK Hynix and regulatory concerns. As a 2x leveraged product, its net asset value theoretically moves by twice the percentage of the underlying stock, making it a highly volatile instrument.