As Elon Musk's SpaceX went public and Korean retail investors trading U.S. stocks moved to heavy net buying, a considerable number of "bull ants" also piled into leveraged ETFs that track twice SpaceX's daily return.
According to interest and the Korea Securities Depository (KSD) on the 19th, from the 15th to the 16th, domestic individual investors bought 103.82 billion won worth of seven leveraged ETFs that track twice SpaceX's daily return.
From immediately after SpaceX's listing, Korean retail investors trading U.S. stocks who rushed to "buy" have been actively adding even high-risk leveraged products. In fact, from the 12th to the 18th, the overseas stock most bought by domestic investors was SpaceX, with net purchases alone reaching $1,812.93 million (about 2.7828 trillion won).
After SpaceX was listed on the 12th, leveraged and inverse ETFs using it as the underlying asset poured into the market starting on the 15th. The U.S. Securities and Exchange Commission (SEC) had expressed concern that launching leveraged and inverse products simultaneously from the first day of listing could trigger extreme share price volatility.
Nevertheless, major global asset managers, including ProShares, Leverage Shares, Direxion, and Defiance, rushed to list SpaceX leveraged ETFs to seize the market first.
The share of domestic investors in total assets under management of SpaceX leveraged ETFs is also significant. The global assets under management (AUM) of the seven SpaceX leveraged ETFs amount to 423.38 billion won, with domestic investors accounting for 26%.
Korean retail investors trading U.S. stocks are also actively investing in inverse ETFs that bet on a SpaceX decline. They recorded net purchases of roughly 17.04 billion won in SpaceX inverse ETFs over two days. In the global AUM of four SpaceX inverse ETFs, domestic individual investors account for about 27%.
A source in the financial investment industry said, "Individual investors seem to be holding SpaceX common shares as a long-term stock while, at the same time, buying leveraged and inverse ETFs to profit from short-term volatility."
Meanwhile, SpaceX, which started at an offering price of $135 at the time of listing on the 12th, jumped 50% in three trading days to $201.80 on the 16th. However, it fell to $185 during the 17th to 18th. As a result, investors who bought SpaceX leveraged ETFs at the peak are estimated to be sitting on about a 17% loss.