Viewpoint: Micron to Face Roughly 2 Million Shares of Forced Selling on Monday, Passive Rebalancing of Leveraged Products to Suppress South Korean Stock Market

BlockBeats News, June 7th - Leverage product researcher degentrading stated that the Hong Kong-listed leveraged fund, Southbound Double Long SK Hynix (7709.HK), due to a significant drop in the price of the South Korean stock SK Hynix last week, needed to forcibly sell about 2 million shares at the opening of the South Korean market on Monday. This sell order size is equivalent to 40% of SK Hynix's normal daily trading volume, creating huge and mechanistic selling pressure. What's more troublesome is that the leverage product's gamma effect will cause more price drops, leading to more selling pressure and potentially triggering a chain reaction.

degentrading believes that the South Korean stock market will face extreme downward pressure on Monday, boldly predicting that after the U.S. stock market opens on Monday, EWY (iShares MSCI South Korea ETF) could drop to $145 (current price $175). degentrading acknowledges that this prediction "may be a bit crazy," but the core logic is that passive rebalancing selling pressure from leverage products will dominate the market, resulting in a short-term extremely bearish view on the South Korean semiconductor sector and the overall stock market, especially focusing on the amplification effect and liquidation risk brought by leverage tools like Southbound Double Long SK Hynix (7709.HK).