The KOSPI index in South Korea saw its intraday decline widen to 7%. At the time of writing, the Direxion Daily 2X Bull Samsung ETF (07747) has fallen by 29.49%, trading at HK$118.1. The Direxion Daily 2X Bull SK Hynix ETF (07709) has dropped 26.44% to HK$109.6, with a turnover exceeding HK$150 billion.

According to a recent Goldman Sachs research report, the South Korean stock market is caught in a structural risk trap characterized by "high weightings and high leverage." For every 1% increase in the weighting of stocks like Samsung and SK Hynix, foreign investors are forced to sell approximately US$2 billion due to diversification rules under the U.S. Investment Company Act, creating a peculiar selling pressure where "the higher the weight, the more foreign selling." Concurrently, a surge in retail investment into leveraged ETFs, options, and margin trading has created intraday volatility far exceeding what fundamental factors would support.

It is noteworthy that on June 22nd, Lee Bok-hyun, Governor of South Korea's Financial Supervisory Service, publicly addressed the overheated investment in single-stock leveraged ETFs for Samsung Electronics and SK Hynix. He expressed deep regret over approving the listing of such products and revealed that regulators are accelerating efforts to formulate measures to protect investors.