As SK hynix fell more than 7% on the 8th, a leveraged financial product tied to SK hynix surged more than 40% just before the market close.
ACE SK hynix single-stock leverage finished the session at 30,000 won, up 49.70% (9,960 won) from the prior trading day.
On the day, as the share price of SK hynix—the underlying asset this product tracks—underperformed, the product's price also fell throughout the session. Since SK hynix closed down 7.68% that day, this product should also have fallen by about 15%.
However, just before the close, a trade was executed at a high bid, triggering this abnormal spike.
In the industry, some speculate that a liquidity provider (LP) with an obligation to submit quotes for exchange-traded funds (ETF) may have had an order mistakenly executed right before the close. Just before the close, 46,813 shares of this product were executed at 30,000 won per share. That is about 1.4 billion won.
As the net asset value (NAV) and market prices diverged, the premium/discount widened sharply. The product's deviation rate currently stands at 85.59%.
Meanwhile, Korea Investment Management said, "Just before the close, when there is no quote-submission obligation, LP quotes widened, and with quotes jumping, market buy orders from investors were executed, sending the price sharply higher," adding, "We will use this incident to review the LP quoting framework and take care to prevent any additional problems."