SK Hynix's deleveraging is nearing completion

The latest trading data further confirms this.

The collapse in volume is a fact

KODEX SK Hynix Single Stock Leveraged ETF (0193T0) indeed saw extreme volume at the end of July:

• Volume on July 29 was approx. 640mn units
• On July 30, approx. 490mn units

Entering August, it rapidly contracted to the 20mn–50mn units range. The closing volume on Aug 18 was approx. 41.85mn units, shrinking by over 90% vs. the peak. Other single-stock leveraged ETFs for SK Hynix/Samsung followed a similar trajectory.

This directly corresponds to the policy taking effect on July 31, raising the minimum cash margin from KRW 10mn to KRW 30mn. Retail traders heavily reliant on margin for repetitive trading were shut out, and combined with prior forced liquidations, leveraged positions were systematically cleared.

De-leveraging nears its end, but side effects are obvious

Your judgment that "the risk of cascading liquidations has decreased, but incremental capital chasing rallies/bottom-fishing has also disappeared" is correct.

Single-stock leveraged ETFs create additional sell pressure via rebalancing during declines, while serving as important incremental buying power during rallies. Now that volume has dropped to this level:

• The risk of a "death spiral" from forced liquidations has significantly decreased
• The market has lost that portion of the most aggressive short-term leveraged buyers

Korean retail margin balances have indeed fallen to yearly lows, while foreign capital continues net selling of Korean stocks. If funds do not return significantly after de-leveraging ends, overall liquidity will worsen, and volatility may shift from "leverage-amplified extreme swings" to "dull knife-like stagnation due to liquidity dry-up".

Analogy to the crypto market at year-end last year

This analogy is apt. Last year-end, the crypto market also experienced:

• Systematic clearing of high-leverage capital
• Cliff-like drop in volume
• Temporary relief from forced liquidation pressure
• But without new capital stepping up subsequently, the market fell into a state of low liquidity, low volatility, and occasional smash-downs

The Korean market currently resembles that phase—the craziest part of leverage has been knocked out, but true "healthy buying" hasn't returned yet.

Looking ahead, the fundamentals of SK Hynix and Samsung itself (especially storage/AI-related) remain the core determinant of the medium-term direction. However, at the short-term trading level, the driver has shifted from "leverage capital dominance" to "liquidity contraction + foreign capital sentiment." If foreign capital continues net selling and retail margin doesn't rebound, low volume will likely become the norm for the foreseeable future.

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