$XL2CSOPHYNIX(07709.HK) View: SK Hynix will face about 2 million shares of forced selling pressure on Monday, with passive rebalancing of leveraged products weighing on the South Korean stock market.

BlockBeats news, June 7, leveraged product researcher degentrading said that the Hong Kong-listed leveraged fund CSOP 2x Long SK Hynix ETF (7709.HK), due to the sharp decline in SK Hynix's stock price last week, will need to forcibly sell about 2 million shares of SK Hynix stock when the South Korean market opens on Monday. The size of this sell order is equivalent to 40% of SK Hynix's normal daily trading volume, creating huge and mechanical selling pressure. More troublesome is that the gamma effect of leveraged products will lead to more selling as prices fall, potentially triggering a chain reaction.

degentrading believes that the South Korean stock market will face extremely strong downward pressure on Monday, boldly predicting that EWY (iShares MSCI South Korea ETF) could fall to $145 (current price $175) after the US market opens on Monday. degentrading admits this prediction "might be a bit crazy," but the core logic is that the passive rebalancing selling from leveraged products will dominate the market, and he is extremely bearish on the South Korean semiconductor sector and the overall stock market in the short term, especially focusing on the amplification effect and liquidation risks brought by leveraged tools like the CSOP 2x Long SK Hynix ETF (7709.HK).

Original link: https://m.theblockbeats.info/flash/349873