Leverage WTI Crude Oil ETN, Trading Halted for 3 Business Days Starting Tomorrow

Leverage Crude Oil ETN 4 Types Resume Trading on 18th
Individuals and Some ETNs Net Buy... Premium Rate Widens Over 200%
About 5 Billion KRW Net Sold in Inverse Leverage Crude Oil ETN

[Asia Economy Reporter Minji Lee] Leverage crude oil exchange-traded notes (ETNs) based on West Texas Intermediate (WTI) have been suspended from trading and are scheduled to resume trading on the 18th.

[Image source=Yonhap News]

According to the Korea Exchange on the 12th, ‘Shinhan Leverage WTI Crude Oil ETN,’ ‘Samsung Leverage WTI Crude Oil ETN,’ ‘QV Leverage WTI Crude Oil ETN,’ and ‘Mirae Asset Leverage Crude Oil Futures Mixed’ resumed trading through single-price trading where prices are set by transactions between individuals. However, all these securities showed a premium rate exceeding 30%, resulting in trading suspension until the 15th. The trading resumption date is the 18th.

On this day, all four leverage ETNs saw their premium rates widen significantly compared to the previous session. Samsung Leverage ETN recorded the largest gap between the indicative value (iv) and premium rate at 289%, up from the previous 270%. Shinhan Leverage ETN’s premium rate widened from 187% to 212%, while Mirae Leverage ETN (93%) and QV Leverage ETN (282%) also saw increases in their premium rates.

Samsung Leverage Crude Oil ETN closed at 700 KRW, down 2.78% from the previous session. Shinhan Leverage Crude Oil ETN closed unchanged at 440 KRW, while QV Leverage WTI Crude Oil ETN (-3.70%) and Mirae Asset Leverage Crude Oil Futures Mixed (-1.48%) both ended lower. During the day, the four leverage ETNs briefly turned positive and traded about 10% higher than the previous session, but all turned downward in the afternoon.

Individual investors continued buying despite the increased premium rates. Looking at net purchase transaction amounts by individuals, Shinhan Leverage Crude Oil ETN saw net purchases worth 16 million KRW, and Mirae Leverage Crude Oil ETN 12 million KRW. Conversely, Samsung Leverage Crude Oil ETN saw securities worth 47 million KRW sold. However, compared to the previous trading day (2.75366 trillion KRW), net purchase transaction amounts significantly decreased.

Individuals who bought inverse leverage crude oil ETNs, also known as ‘Gopbus,’ betting on falling oil prices, sold securities worth about 5 billion KRW on this day. By item, ‘Shinhan Inverse 2X WTI Crude Oil Futures’ accounted for 4.1 billion KRW, ‘QV Inverse 2X WTI Crude Oil Futures’ 6 million KRW, and ‘Samsung Inverse 2X WTI Crude Oil Futures’ 640 million KRW.

Meanwhile, as the financial authorities face the risk of increased losses for individuals investing in crude oil leverage ETNs, they are considering measures to raise market value through securities consolidation (reverse stock split). Furthermore, as early as this week, measures to revitalize the ETP (ETNㆍETF) market, including the introduction of a basic deposit system and strengthening the responsibilities of liquidity providers (LPs), are expected to be announced.

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