Global Investors Leverage Up to Bet Big on Semiconductors: Is the "Wolf Really Here" This Time?
On July 2, the group of technology stocks that had been surging rapidly in the A-share market recently suffered a heavy setback: the China Securities Semiconductor Index (H30184) plummeted 8.31%; the Guozheng Chip Index (980017) crashed 8.74%; and Zhaoyi Innovation (603986.SH), the leader of the storage concept stocks, hit the daily limit down.
Has the "wolf" really come? In fact, in the past few months, global investors have been pouring into semiconductor stocks. Among them, what is particularly noteworthy is the "enthusiasm" of investors for semiconductor leveraged products.
In early January 2026, investor Mr. Zheng started buying CSOP Double Leveraged SK Hynix (07709.HK), which tracks the performance of SK Hynix, through Yingli Securities in Hong Kong. The first purchase price was HK$20 per share, and he bought 5 lots (1 lot = 100 shares) at that time. Thereafter, he continuously added to his positions during pullbacks, and his maximum position reached 24 lots. In late April, he started selling, but then bought again at prices of HK$40, HK$80, HK$90, etc. In June, he started to continuously reduce his positions. On June 26, Mr. Zheng still had 8 lots in his hand, and the overall profit was close to HK$200,000.
However, starting from June 26, CSOP Double Leveraged SK Hynix experienced a wave of decline. On July 2, the intraday decline of this product reached as high as 30%. On July 2, Mr. Zheng added 5 lots at the price of HK$115. He told reporters that the fluctuations of this product have become the norm, but it will rebound after each deep adjustment, and there is also room for recovery in this adjustment.
During the interview, the reporter also learned that another investor had sold his CSOP Double Leveraged SK Hynix before, but started buying again on July 2. The investor said that he bought 2 lots first on that day, and if the price continued to fall, he would add to his positions in batches.
The full name of CSOP Double Leveraged SK Hynix is "CSOP SK Hynix Daily Leveraged (2x) Product", which was issued by CSOP Asset Management Limited (hereinafter referred to as "CSOP") in the Hong Kong market in October 2025. After the product was listed, it quickly attracted market attention and popularity. On June 25, the intraday price of this product once rose to HK$193.65 per share, hitting a record high, with a cumulative increase of more than 1000% this year; the scale also once exceeded HK$130 billion, a 200% increase compared with the scale of more than HK$42 billion at the beginning of May. It is currently the world's largest leveraged and inverse product for individual stocks.
In addition to the Hong Kong market, this wave has also swept across the United States and South Korea. Without exception, the targets that investors are "gambling" on are all the semiconductor leading stocks in the global artificial intelligence (AI) industrial chain.
Simon White, a macro strategist at Bloomberg, wrote in his latest article that as of the end of June 2026, the total assets of leveraged and inverse leveraged stock ETFs in the United States were approaching US$200 billion. On some trading days, the trading demand brought about by rebalancing alone was as high as more than US$50 billion, hitting a record high. The data released by Goldman Sachs' global fixed - income and equity team also shows that as of May 27, 2026, the asset management scale of global leveraged/inverse individual stock leveraged ETFs has reached the US$60 billion mark, doubling compared with the beginning of April.
The leveraged products tracking SK Hynix and Samsung Electronics newly listed in South Korea at the end of May also staged a "money - sucking myth", attracting more than US$2 billion in funds on the first day of listing.
Double Leverage
On October 16, 2025, CSOP launched CSOP Double Leveraged SK Hynix on the Hong Kong Stock Exchange. According to public information, the investment objective of this product is to track the performance of SK Hynix stocks and provide a daily 2x leverage return.
The product information shows that this is an individual stock leveraged product. Different from traditional exchange - traded funds, this product seeks a leveraged investment performance relative to the underlying stock and only on a daily basis. That is to say, this product will amplify the rise and fall of SK Hynix's individual stock synchronously. No matter how much the individual stock rises or falls, the fluctuations of this product will be magnified twice correspondingly; and this product only guarantees that the single - day performance is twice that of the underlying stock. If the position is held for more than one day, affected by the compound interest effect and volatility loss, the cumulative return is not equal to twice the rise and fall of the underlying stock.
CSOP told reporters from Economic Observer that thanks to the enterprising spirit of the Hong Kong regulatory authorities and the mature mechanism of the Hong Kong market, Hong Kong issued the individual stock leveraged products of South Korean AI concept stocks several months earlier than the South Korean domestic market, and comprehensively outperformed the South Korean domestic products in terms of scale, trading volume, and stable operation of the products; at that time, launching the world's only leveraged exchange - traded product for SK Hynix in Hong Kong was aimed at providing investors with double profit opportunities and seizing the leapfrog growth of SK Hynix in the AI - driven semiconductor market.
Before the launch of this product, in the second quarter of 2025, SK Hynix had surpassed Samsung Electronics to become the world's number one DRAM supplier in terms of sales volume. From 2020 to 2024, the compound annual growth rates of SK Hynix's annual revenue, operating profit, and net profit reached 20%, 54%, and 58% respectively.
Compared with Mr. Zheng, Mr. Chen is more cautious. In the first half of May, Mr. Chen bought 6 lots of CSOP Double Leveraged SK Hynix at the price of HK$95 per share. Soon, the product pulled back to the range of HK$80 to HK$90, resulting in a loss of principal. Fortunately, the product then had a wave of rise, and he resolutely sold the product at the price of HK$143. He held the product for about a month and made a profit of about HK$12,000.
Mr. Chen told reporters from Economic Observer that the product has large fluctuations, and the volatility loss is very difficult to bear, so it is not suitable for long - term holding. He also said that because he does not have a South Korean stock account, he cannot invest in SK Hynix individual stocks and can only buy this product. The overall trend of SK Hynix's stock price is rising, and double leverage will have a positive compound interest effect, but there may also be relatively serious losses in a volatile market.
Long - term bull market:
Long - term bear market:
Volatile market:
(Performance of the product and the underlying individual stock under different market conditions)
According to the product information, assuming that the stock price of the underlying individual stock is 100 on the first day, the leveraged product will amplify the return, but when held for a long time, the actual return will deviate from the leverage multiple. As shown in the above figure, in a long - term bull market, the return of the double - leveraged product exceeds twice that of the related individual stock (23.4% > 11.4% x 2 = 22.8%), and the return is better than that of the individual stock; in a long - term bear market, the decline of the double - leveraged product is greater than that of the related individual stock; in a volatile market, the return of the double - leveraged product is also inferior to the performance of the related individual stock.
According to the data provided by CSOP, as of June 16, the returns of CSOP Double Leveraged SK Hynix in 1 month, 3 months, 6 months, from the beginning of 2026 to the present, and since the product was established were 196.73%, 255.05%, 1143.23%, 755.72%, and 1675.71% respectively.
Global Craze
Before launching CSOP Double Leveraged SK Hynix, on May 28, 2025, CSOP launched CSOP Double Leveraged Samsung (07747.HK) and CSOP Double Inverse Samsung (07347.HK).
When launching this pair of leveraged products tracking Samsung Electronics' individual stocks, CSOP said that as a global technology giant, Samsung Electronics is the largest listed company in South Korea by market value, has a large number of local investors, and has been among the world's highest - market - value listed companies for many years. However, in the global market at that time, there were no leveraged and inverse products related to Samsung Electronics; considering that the trading time zones of Hong Kong and South Korea are similar and combined with the company's advantages in leveraged and inverse products, launching this pair of products has become a new tool for strategic trading and risk hedging.
The scale of the individual stock leveraged products tracking Samsung Electronics is also constantly expanding. As of mid - June, the scale of CSOP Double Leveraged Samsung reached HK$34.5 billion. On the basis of a 216% scale increase in May, it achieved a scale increase of more than 50% in June.
A Hong Kong investor told reporters that his investment philosophy is not to choose individual stocks or do band trading. After aiming at a certain direction, he increases leverage for investment. He firmly believes in the profitability of storage technology giants and predicts that the profitability of the three major storage giants, Micron Technology, Samsung Electronics, and SK Hynix, will be 25% to 40% higher than the market consensus in 2027. Therefore, he bought CSOP Double Leveraged SK Hynix and CSOP Double Leveraged Samsung in January 2026. In addition, he also bought a 3x leveraged product tracking the semiconductor index of the New York Stock Exchange.
In addition to the semiconductor leveraged products in the Hong Kong stock market being hotly pursued by funds, the semiconductor leveraged products in the US stock market have also seen an influx of funds. According to the data of Direxion, a fund issuer, in mid - June, the 3x leveraged semiconductor ETF (SOXL) in the US stock market hit a record high, with an increase of 462% this year; the asset scale has increased from US$12.677 billion at the end of 2025 to US$33.553 billion at the peak in June this year, a 165% increase in scale.
On May 27, 2026, 16 2x leveraged and inverse individual stock leveraged products focusing on Samsung Electronics and SK Hynix were listed in South Korea. On the first day of listing, the new products were pursued by funds, and the total asset scale of the 16 products directly exceeded 4.3 trillion won (equivalent to about US$2.76 billion). The data disclosed by the Korea Exchange shows that from June 8 to June 12, the cumulative trading volume of 4 single - stock leveraged products of only two major ETF brands, KODEX and TIGER, reached 33.65 trillion won.
In addition, as the stock prices of Chinese A - share technology giants continue to rise, recently, Wall Street's leveraged giants have also set their sights on Chinese A - share related stocks. For example, on June 10, ProShares, a well - known US leveraged product issuer, submitted a document to the US Securities and Exchange Commission, planning to launch 2x leveraged products respectively tracking "multiple A - share technology leaders such as Zhongji Xuchuang, Xinyisheng, Tianfu Communication, and Zhaoyi Innovation".
Potential Risks
The popularity of leveraged products also brings potential risks on the other side.
Robert Quinn, a futures trading expert at Goldman Sachs, pointed out in the latest issue of "Goldman Sachs Weekly Briefing" that the global leverage chain has extended to every corner: retail investors are frantically pouring into nearly US$200 billion of leveraged ETF products, institutions are building positions through TRS (total return swaps), the leverage of dealers has reached the mid - year historical peak, and the South Korean market has even evolved into a "huge self - reinforcing feedback loop". Once the financing chain breaks somewhere, a chain collapse may occur in an instant.
Wang Hongying, the dean of the China (Hong Kong) Financial Derivatives Investment Research Institute, said in an interview with reporters from Economic Observer that such products achieve leveraged returns through stock swaps by signing swap contracts with securities firms. Securities firms need to reset their positions on a daily basis to ensure that the net value of leveraged transactions is consistent with the overall trend of ETF products.
He also said that this kind of ETF trading products with built - in leverage are essentially financial derivatives trading tools. When the market fluctuates greatly, both the returns and risks will be magnified synchronously. From the perspective of the market trading mechanism, if market makers stop quoting prices at the end of the trading session, the market price will have the problem of valuation distortion. Coupled with the leverage attribute of the product itself, the losses of investors will expand sharply. In extreme cases, the investment principal may even be zero.
Wang Hongying further explained by taking the leveraged ETF products in the South Korean market as an example. The products of this kind in the South Korean stock market are swap transactions, and market makers must provide liquidity to maintain normal market trading. According to the trading rules of the South Korean stock market, market makers do not need to fulfill the obligation of active quotation in the last ten minutes before the daily closing. In this case, if the relevant ETF products are traded at the market price, the market will experience large price fluctuations due to discontinuous quotations, directly causing the valuation distortion of ETF products and thus generating investment risks.
The Financial Supervisory Service of South Korea released a report on June 18, saying that from May 27 to June 12, the maximum drawdown of Samsung Electronics' stock was 18.0%, and the drawdown of the corresponding 2x leveraged ETF was as high as 35.9%; the drawdown of SK Hynix's stock was 19.1%, and the drawdown of its leveraged ETF reached 38%. The Financial Supervisory Service of South Korea warned that under the rule of a 30% limit on the rise and fall of individual stocks, the theoretical maximum single - day loss of a 2x leveraged product can reach 60%.
For ordinary individual investors, Wang Hongying suggested that currently, the trading in the semiconductor track is extremely hot and funds are concentrated. Coupled with the aforementioned problem of discontinuous quotations, the volatility of the valuation system of semiconductor leveraged ETFs will be further intensified. From the perspective of retail investors' investment, this kind of products is only suitable for short - term speculative operations. Investors can buy when the market price plummets and sell in time when the price rises to earn short - term price difference profits. However, this kind of products is not suitable for medium - and long - term holding. The long - term investment return has great uncertainty, and investors are more likely to face huge losses.
This article is from the WeChat public account "Economic Observer"