Single-stock leveraged ETFs have become a major loss-making machine for retail investors, with South Korean retail investors suffering massive losses of 2.3 trillion won, equivalent to approximately $1.7 billion, over just two months.

According to data compiled by South Korea’s financial regulators, since the launch of single-stock leveraged exchange-traded products (ETPs) in May this year, investors have lost an estimated 2.3 trillion won (approximately $1.7 billion) between May 27 and August 14. This marks the first time regulators have disclosed the overall loss incurred by South Korean investors in such highly leveraged single-stock products. It should be noted that the data only covers 10 leading South Korean securities firms, so it does not represent total losses for all South Korean investors in leveraged products. Since July, regulators have rolled out a series of measures to restrict trading in single-stock leveraged products, including temporarily banning the listing of new related products, raising investors’ minimum cash margin requirements, and mandating specialized training for investors before they trade. This signals a sharp shift in South Korea’s regulatory policy in less than two months: from encouraging the launch of such products in the domestic market in May to curbing their expansion starting in July.