SK Hynix ETF Raises Options Cap to 49% After Stock Surges 340%

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โดย GuruFocus·Read original
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CSOP Asset Management is raising the options investment limit for its $14.4 billion leveraged ETF tied to SK Hynix to 49% of net asset value from 40%, effective Tuesday, after the South Korean chipmaker's shares surged more than 340% this year. The ETF, which seeks to deliver twice the daily return of SK Hynix stock, had previously lifted the cap from 25% in May. CSOP said the change reflects the fund's growing size and unpredictable market volatility, while potentially giving it more flexibility to track exposure to SK Hynix. Bloomberg Intelligence analyst Rebecca Sin warned that increased options use may worsen the ETF's tracking error and amplify downside risk for investors. The fund's assets rose by $4.8 billion last week alone, and CSOP has cautioned that new unit creation may need to be suspended if counterparties hit limits on swaps and options, with expected swap and options costs possibly rising to as much as 40% of net asset value from 36%.

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