Leveraged SK Hynix ETF Crashes 87%, Trader Losses Hit HK$150 Million
SingTao · 1 SOURCESabout 1 hour ago2 MIN
Summary
The CSOP 2x Leveraged SK Hynix (stock code: 7709) has become a painful lesson for Hong Kong retail investors, collapsing from a historic high of HK$193.65 to as low as approximately HK$25 — an 87% crash in just over a month . The leveraged exchange-traded product (ETP), which briefly surpassed the Tracker Fund as Hong Kong's largest listed product in June, has devastated portfolios and reportedly led to a trader causing over HK$100 million in losses for his firm .
Key Points
- The product peaked at HK$193.65 on June 25, 2025, with a market value exceeding HK$130 billion, making it Hong Kong's largest ETP and dethroning the Tracker Fund's nearly 30-year dominance .
- By August 5, the ETF had crashed to HK$38.94, representing a 79.9% decline from its peak, with intraday lows near HK$25 marking an 87% total drawdown .
- A 26-year-old trader at a Central-based asset management firm allegedly misappropriated HK$50 million in unauthorized funds and leveraged it several times, resulting in reported book losses of HK$150 million .
- Retail investors on Futu Bull's discussion forum shared devastating losses, including one who lost HK$300,000 and saw his wife leave with their daughter, and another who lost HK$147,000 in a single day .
- Futu Securities senior analyst Fung Man-wai warned that leveraged and inverse products are designed solely for single-day trading, are unsuitable for overnight or long-term holding, and should never exceed 5% of a portfolio .
Why It Matters
The CSOP 2x Leveraged SK Hynix episode exposes how Hong Kong's retail-heavy market can be vulnerable to complex derivative products marketed during speculative booms. The Securities and Futures Commission's recent refusal to approve A+H share leveraged and inverse products suggests regulators are already tightening oversight, but the damage to individual investors underscores gaps in risk disclosure and investor education for structured ETPs .
The CSOP 2x Leveraged SK Hynix episode exposes how Hong Kong's retail-heavy market can be vulnerable to complex derivative products marketed during speculative booms. The Securities and Futures Commission's recent refusal to approve A+H share leveraged and inverse products suggests regulators are already tightening oversight, but the damage to individual investors underscores gaps in risk disclosure and investor education for structured ETPs .