Leverage WTI Crude Oil ETN Resumes Trading on 22nd... "Stepping Stone Trading Continues"
[Asia Economy Reporter Minji Lee] Leveraged crude oil exchange-traded notes (ETNs) based on West Texas Intermediate (WTI) have once again been suspended from trading. The next trading day is scheduled for the 22nd.
According to the Korea Exchange on the 18th, ‘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 21st.
On this day, the premium rates of all four leveraged ETNs significantly decreased compared to the previous session. Shinhan Leverage Crude Oil ETN dropped from 212.4% to 85.2%, Samsung Leverage ETN from 289% to 160%, Mirae Asset Leverage ETN from 93% to 56%, and QV Leverage ETN from 282% to 154%. However, none of the securities fell below the 30% threshold.
Samsung Leverage Crude Oil ETN closed at 640 KRW, down 8.57% from the previous session. Shinhan Leverage Crude Oil ETN ended at 355 KRW, down 19.32%, and QV Leverage WTI Crude Oil ETN also closed lower, down 9.62%. Mirae Asset Leverage Crude Oil Futures Mixed closed up 5% at 2,100 KRW.
Individual investors continued to increase their buying pressure in the market. Despite the large gap between intrinsic value (IV) and price, investors purchased 9.1 billion KRW worth of leveraged crude oil ETNs throughout the day. Particularly, in Shinhan Leverage Crude Oil ETN, while financial investors sold securities worth 9.63 billion KRW in the market, individuals bought securities worth 9.157 billion KRW. Mirae Asset Leverage Crude Oil ETN also saw a net purchase of 20 million KRW. Conversely, Samsung Leverage Crude Oil ETN experienced sales of securities worth 60 million KRW.
On the same day, financial authorities announced plans to increase market value through securities consolidation (reverse stock split) as individual investors faced the risk of significant losses from investing in crude oil leveraged ETNs. Additionally, to ‘stabilize the ETP (ETNㆍETF) market,’ starting in September, only investors with a minimum deposit of 10 million KRW will be allowed to trade leveraged products.
Hot Picks Today
"Suspicious Timing?"...Trump Traded Stocks After Praising Wartime Capabilities
- "I Went to 10 Convenience Stores and Still Couldn't Buy It": The Bread Sensation That Sold 100 Million Units Already [The Way We Shop Now]
- Trump Pressures Taiwan to Relocate Semiconductor Industry to U.S., Says "Taiwan Took Away America's Semiconductor Industry"
- There Is a Distinct Age When Physical Abilities Decline Rapidly... From What Age Do Strength and Endurance Drop?
- "Contact Me First If Houses Are Built": Wealthy Clients Eyeing... Will Ultra-High-End Residences Worth 20 Billion Won Be Developed? [Real Estate AtoZ]
A Financial Services Commission official stated, “Early liquidation will not be conducted for leveraged ETNs at this time,” and added, “From July, if the premium rate exceeds 6% for domestic underlying assets or 12% for overseas underlying assets for three consecutive days, trading will switch to single-price trading.”
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
