Crude Oil ETN Plummets After Trading Resumption... Discrepancy Rate Remains

Some Crude Oil ETNs Still Exceed 300%

[Asia Economy Reporter Minji Lee] Despite financial authorities repeatedly issuing investment warnings about crude oil Exchange Traded Notes (ETNs), individual investors' enthusiasm for crude oil investment remains unabated. On the 27th, as trading resumed for four crude oil leverage ETN products, the premium rates of some products still exceeded 300%.

According to the Korea Exchange, as of 10:30 a.m. that day, the "Shinhan Leverage WTI Crude Oil Futures ETN" was trading at 295 won, down 54.62% from the previous close. The product's Intraday Indicative Value (IIV) was 122.31 won, resulting in a premium rate of 141%. The "Samsung Leverage WTI Crude Oil Futures ETN" showed a premium rate of 432%, and the "Mirae Asset Leverage Crude Oil Futures Mixed ETN(H)" recorded 70.11%. The "QV Leverage WTI Crude Oil Futures ETN(H)" traded at a premium rate of 319.22%, with a price higher than its IIV of 118.87 won.

[Image source=Yonhap News]

All four products resumed trading through single-price auctions. The "Samsung Leverage WTI Crude Oil Futures ETN" and "QV Leverage WTI Crude Oil Futures ETN(H)," which had not traded from the 21st to the 24th, saw liquidity providers (LPs) newly list 100 million shares and 2 million shares on the market, respectively, that day.

If the premium rate of these products does not fall below 30% based on the closing price that day, trading will be suspended again for three trading days. After the three-day suspension, trading will automatically resume, but if the premium rate surges again, trading will be suspended once more. To lift the single-price auction, the premium rate must fall below 6%.

A Korea Exchange official stated, "We are reviewing overseas cases regarding early liquidation of the products, but there have been no discussions with issuers," adding, "We will continue single-price auctions and trading suspensions until investor sentiment stabilizes."

This content was produced with the assistance of AI translation services.