Strategist: Samsung Electronics and SK Hynix leveraged ETFs face real-world test

According to Odaily, derivatives and quantitative strategist Gordon Schneider pointed out in a report published on Smartkarma that for the 2x leveraged exchange-traded funds (ETF) tracking Samsung Electronics and SK Hynix to recover to their June 22 level, they would need to rise by about 33%, meaning the underlying stocks would have to rebound by approximately 16.5%.

The report states that on Tuesday, shares of both Samsung Electronics and SK Hynix dropped by double digits, causing the related ETF prices to fall nearly 25%. Among them, the Samsung 2x leveraged ETF has accumulated a drop of 5.4% since its launch on May 27. He noted that the newly launched single-stock 2x leveraged ETF in South Korea can enhance returns in trending markets, but when the market is highly volatile, value can be rapidly eroded, making it most suitable for short-term tactical momentum investing. (Golden Ten Data)