"It's a wake-up call," said Francis Tan, chief strategist for Asia at Indosuez Wealth Management in Singapore.
"Both for those who are greedy and those who are fearful," he said. "For those who were fearful ... it's a great time to buy in, but if you are already overweight this gives you a reminder that exposure (to chips) can be a volatile game."
The KOSPI on Tuesday was trading below 7,000 points and has shed about 25% from its record closing high of 9,114.55 points, confirming it has been in a bear market since late June.
Even so, it remains up roughly 60% this year, trouncing the 10% gain for MSCI's broadest gauge of global equities .MIWD00000PUS.
"Just as it went up explosively, it went down explosively," said Lee Seung-ho, a 24-year-old college student. He took out margin loans to turn 10 to 20 million won ($7,000 to $13,000) into 300 million won in the bull run, before seeing it evaporate.
"I think people like my mom and grandma, while saying Samsung is South Korea's No.1 company, do not fully understand the risks of leveraged investments (and) think about them rising twice as fast, without thinking of falling twice as fast."
Few stocks showcase the market mania like SK Hynix, which rode a tidal wave of borrowed money to a tripling of its share price, helping it pull off a record $26.5 billion U.S. listing by a foreign company. The stock debuted 14% above its offer price.
Yet the same stock is simultaneously experiencing the most wrenching volatility in its history, tumbling 14% in Seoul on Monday, while a twice-leveraged ETF tracking the shares plunged more than 30% in Hong Kong. The selling fed on itself, amplifying declines and helping drag the KOSPI 8% lower.
Samsung Electronics and SK Hynix together now account for just over half of the KOSPI, meaning sharp moves in either stock can overwhelm the broader market.
"The impact of single-stock leveraged products on the index is higher than in other countries due to the high share of Samsung and SK Hynix in the KOSPI," said Park Woo-yeol, an analyst at Shinhan Securities. By comparison, a massive U.S. stock such as Nvidia NVDA.O represents only 7% of the S&P 500.
The KOSPI’s volatility index .KSVKOSPI stood at 82.07 on Tuesday, after hitting a record high of 97.99 on June 29, compared with 28.85 at end-2025.
South Korea's Financial Supervisory Service said it would monitor the products and investigate excessive marketing, if needed. The Bank of Korea told a lawmaker it was watching whether single-stock ETFs could distort markets and increase volatility.
EWY•
