From August, Korea is putting a brake on the 2x leveraged products that let retail investors double their bet on Samsung and SK Hynix. Meru walks through the rules, and the theme is one thing: raise the cash bar high enough to filter the small guy out. From August 5, the base deposit jumps from 10 million won to 30 million, and the minimum trade unit goes from 1 share to 20. Brokers are also barred from the marketing trick of waiving or cutting that deposit for higher-tier clients. The real teeth come on August 19. Until now you could fill up to 70% of the deposit with stocks and bonds you already held, needing only a little actual cash; from that date, you need 30 million won in pure cash sitting in the account. Holding 300 million won of bank shares won't count: if your cash is under 30 million, you can't buy more. In plain terms, it gets much harder to average down when the price falls. And this applies not just to Korean names but to overseas leverage like 2x Tesla too, a signal not to just flee to the US or Hong Kong market. Meru's one-liner: with the deposit hike plus the no-collateral rule, the real hurdle feels north of 50 million won. It will cut retail demand somewhat, but whether that's enough remains to be seen.
Why it matters · Emin Yurumazu's bear case named Korea's leveraged retail crowd as the detonator. This is the regulator reaching for that fuse: fewer forced buyers on the way up, and fewer forced sellers if it turns.
Worth asking · Leverage curbs: protecting retail, or taking away their shot?