Stock Track | CSOP SK Hynix Leveraged Product Plummets 14.99% Intraday on Underlying Stock Profit-Taking and Analyst Concerns

Stock Track
Jul 13

The CSOP SK Hynix Daily (2x) Leveraged Product (07709) plummeted 14.99% during intraday trading on Monday, reflecting amplified losses in its underlying asset, SK Hynix Inc.

This sharp decline in the leveraged product follows a significant correction in SK Hynix's shares traded in Seoul. Analysts point to profit-taking activity after the company's American Depositary Receipts (ADRs) experienced a strong 12.8% surge on their Nasdaq debut this past Friday. Furthermore, analysts at Korea Investment & Securities forecast that the company's second-quarter operating profit could fall approximately 8% below market expectations, citing its higher revenue exposure to High Bandwidth Memory (HBM).

Market participants also noted a typical structural valuation gap between local shares and ADRs for global giants, which was highlighted by the ADRs closing at a roughly 15% premium on Friday. Experts suggested the initial momentum from the New York listing has been absorbed, leading to significant intraday profit-taking and arbitrage unwinding, which pressured the stock and, consequently, this leveraged product.

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