JPMorgan has noted that, given the structure of investor positioning and earnings growth, the pullback in South Korean equities following the July AI/memory recovery may prove more orderly than previous AI-driven rebound cycles.

Analysts including Tony Lee wrote in a report that the current price action "looks more controlled than explosive," citing an "improved Gamma backdrop" that reduces the risk of mechanically amplified volatility and earnings-per-share revisions.

Despite improvements in South Korea's memory fundamentals, the market remains a laggard following the July AI/memory recovery and still has room to catch up, particularly if macroeconomic factors such as high yields, oil prices, and declining risk appetite in Asian markets stabilize.

South Korea's volatility environment improved in September, allowing traders to build long Gamma positions in equities worth approximately US$430 million — the largest long Gamma holding in the past year. "Because call option prices are elevated, we believe the most appropriate way to hold KOSPI2 upside exposure is through structured products with rich convexity characteristics."

Ahead of third-quarter earnings releases from Samsung and SK Hynix, analysts view "HBM demand, pricing and product mix, exchange rates, as well as capital expenditure discipline and shareholder return updates as key catalysts, with the potential for significant market swings."