Korea's ETF Crackdown Is Working. The Damage Already Done Is the Problem.

South Korea's financial regulators have achieved something rare: they actually stopped a speculative spiral in its tracks. Daily trading volume in the KODEX SK Hynix leveraged ETF collapsed from a June peak of 7.4 trillion won to 560 billion won on August 4, a 92% decline in roughly six weeks. But quelling the frenzy is not the same as repairing the damage, and the structural problems left behind are considerably harder to fix than the speculative volumes that triggered them. Key Takeaways Daily volume in the KODEX SK Hynix leveraged ETF dropped 92%, from 7.4 trillion won at the June peak to 560 billion won on August 4, per Reuters. The KOSPI fell 10.84% on July 28 in a single session, trigg…