'Stocks Have Turned Into a Casino': 1.16 Million Complete Leverage Training as Retail Losses Mount

1.16 million completed leverage training in the first half as retirees and young investors piled in

First-half completions for leveraged ETF courses surged 19-fold

Six leveraged SK Hynix ETFs drew 8.5456 trillion won ($6.14 billion)

Five leveraged Samsung Electronics ETFs attracted 4.7211 trillion won ($3.39 billion)

The number of investors completing mandatory pre-trading education for leveraged exchange-traded funds jumped 19-fold in the first half from a year earlier. The surge came amid a frenzy for single-stock leveraged ETFs tied to Samsung Electronics and SK Hynix, drawing in retirees' nest eggs and young investors' seed money. Those products are estimated to have generated steep losses as returns were cut roughly in half during extreme market volatility. Retail investors are increasingly complaining that the stock market has become "a casino" rather than a place for investment.

More Than 5,000 Minors Joined the Rush

Data the Korea Financial Investment Association submitted to the office of People Power Party lawmaker Kang Myung-gu, a member of the National Assembly's Political Affairs Committee, showed 1,162,751 people completed the basic leverage course at the association's Financial Investment Education Institute from January through June. That was about 19 times the 60,972 recorded in the same period last year. It was also about six times the 205,911 people who completed the course in all of last year.

Enrollment in the advanced course required for single-stock leveraged investing also surged. Monthly completions totaled 4,832 in April, 401,001 in May and 284,376 in June after the course was introduced. Cumulative completions since April reached 690,209, suggesting the number of actual single-stock leveraged investors may be around 700,000.

By age group, investors in their 40s accounted for the largest share of advanced-course completions from April through July 13 at 210,745. They were followed by people in their 50s with 189,308, 30s with 176,488, 20s with 82,172, 60s with 70,339, 70s with 10,499 and 80s with 1,353. The number of minors completing the course reached 5,596 despite additional requirements such as parental consent. The appetite for high-return leverage bets has spread beyond adults to underage investors.

The single-stock leveraged and inverse products that drew heavy retail money have since become what local investors call a graveyard for individuals, producing large losses in a highly volatile market. From their May 27 launch through July 16, the 16 single-stock leveraged and inverse ETFs tied to Samsung Electronics and SK Hynix recorded total net inflows of 13.4133 trillion won ($9.63 billion) over about two months.

Six single-stock leveraged SK Hynix ETFs attracted 8.5456 trillion won ($6.14 billion), while five single-stock leveraged Samsung Electronics ETFs drew 4.7211 trillion won ($3.39 billion) in net inflows. By contrast, two inverse products designed to deliver twice the gains from declines in Samsung Electronics and SK Hynix shares brought in a combined 146.6 billion won ($105 million).

The biggest retail net buy was KODEX SK Hynix Single Stock Leverage, which drew 4.9991 trillion won ($3.59 billion). It was followed by TIGER SK Hynix Single Stock Leverage with 3.4461 trillion won ($2.48 billion), KODEX Samsung Electronics Single Stock Leverage with 3.0757 trillion won ($2.21 billion), TIGER Samsung Electronics Single Stock Leverage with 1.8916 trillion won ($1.36 billion), SOL SK Hynix Futures Single Stock Inverse 2X with 149.3 billion won ($107 million), and ACE SK Hynix Single Stock Leverage with 98.6 billion won ($70.8 million).

As money poured in, sharp declines in the underlying shares slashed returns on the leveraged products. KODEX SK Hynix Single Stock Leverage, the fund that attracted the most money, tumbled 47.5% during the period, falling to 14,585 won from 27,775 won. That was more than double SK Hynix's 17.9% decline over the same stretch. KODEX Samsung Electronics Single Stock Leverage dropped 41.7% as Samsung Electronics shares fell 16.9%.

The inverse products also lost money. SOL SK Hynix Futures Single Stock Inverse 2X fell 31.1%, while PLUS Samsung Electronics Futures Single Stock Inverse 2X lost 8.9%. From the start of July through July 16, retail investors bought 10.704 trillion won ($7.69 billion) of Samsung Electronics and 6.2424 trillion won ($4.49 billion) of SK Hynix, making them the two most-bought stocks amid the market's sharp swings.

Kospi Intraday Volatility Hits 6.75%, Highest Since 1987

Investor complaints that the stock market has become a gambling table are growing as volatility intensifies. Korea Exchange data showed the Kospi's average intraday volatility rate stood at 6.75% from the start of July through July 16. That was the highest since the exchange began compiling the data in 1987. It topped the previous record of 6.11% set in October 2008 during the global financial crisis, as well as 5.37% in December 1997 during the Asian financial crisis.

The intraday volatility rate is calculated by dividing the day's high-low spread by the average of the high and low. For July, that means the index moved an average of 3.37% above or below its midpoint in a single trading session.

The Kospi has shown extreme volatility this year. Three of the top 10 monthly readings for intraday volatility over the past two decades were recorded in 2026. Along with July, June ranked in the top 10 at 5.02%, while May also made the list at 4.02%.

The Kospi has posted double-digit intraday volatility only nine times in its history, and three of those came this year. The reading jumped to 11.42% on March 4, hit 11.18% on June 23 and reached 10.42% on July 13. The VKOSPI, the Kospi 200 volatility index often referred to as Korea's VIX, stood at 87.14 on July 16. It closed at 96.94 on June 29, the highest since the exchange began officially publishing the gauge on April 13, 2009.

In the brokerage industry, analysts say investor sentiment is being rattled by even minor noise despite strong earnings from global semiconductor companies. "Recently, investors have shown a tendency to capitulate and dump shares if they find even the slightest excuse," Lee Jae-won, an analyst at Yuanta Securities, said. Volatility from leveraged ETFs and the absence of clear net buyers pushed the index down to valuations even lower than during the financial crisis, he added.

Criticism is also coming from politicians. People Power Party lawmaker Park Soo-young said the Lee Jae-myung administration pushed ahead with the launch of single-stock products tied to what he called "Samjeonnix" - a reference to Samsung Electronics and Hynix - in order to prop up share prices before local elections. The result, he said, was a stock market swinging like a casino. "In July alone, 7 trillion won ($5.03 billion) flowed into single-stock Samjeonnix ETFs, returns were cut in half, and only retail investors were left in tears," Park said.

Na Kyung-won, also of the People Power Party, said leveraged ETFs had become gambling products that inflicted heavy losses on seniors' retirement funds, young people's seed money and the investments of 14 million retail investors. She said there had been no accountability or apology for the policy failure.

Former People Power Party lawmaker Yoo Seong-min called for a parliamentary investigation. In a market where Samsung Electronics and SK Hynix account for more than 50% of market capitalization, authorities must be held responsible for introducing high-risk leveraged products that should not even be called ETFs and for the purpose behind their introduction, he said.

Kang Kyung-ju, Hankyung.com reporter qurasoha@hankyung.com