On June 5, Direxion Daily South Korea Bull 3X ETF (KORU) plunged 23.41% in regular trading, trading at $806.6/share, with trading volume of $303 million. The leveraged ETF amplified losses from a historic selloff in Korean equities.
The decline was driven by the KOSPI index crashing as much as 7% intraday, triggering circuit breakers that halted programmatic selling after KOSPI 200 futures fell 5%. Samsung Electronics dropped over 7% and SK Hynix plunged nearly 10%. The immediate catalyst was Broadcom's revenue miss, which cast doubt on the sustainability of the AI investment boom. These two chip giants account for 54% of KOSPI's index weight and nearly half of its daily turnover.
Compounding the selloff, foreign investors dumped over $10 billion in Korean stocks this week. Korean margin lending has surged to a record 38 trillion KRW, while the Korean Finance Minister publicly warned about leveraged speculation and herd behavior. The Korean won fell to its lowest level since March 2009, intensifying foreign capital outflows. Analysts noted the market faces elevated de-leveraging risk in the near term despite the structural AI demand thesis remaining intact.
The fund invests at least 80% of its net assets in financial instruments providing daily 3x leveraged exposure to the MSCI Korea 25/50 Index, covering approximately 85% of South Korean free float-adjusted market capitalization. It is non-diversified.
(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)
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