SK Hynix Recovers After Leveraged ETF Volatility Triggers Margin Calls

SK Hynix shares surged over 8 percent on July 21, 2026, rebounding from a sharp decline where the stock dropped more than 20 percent over two days. The volatility was fueled by a massive margin unwind in South Korea, resulting in margin calls for approximately 12 million retail traders—over 3% of the adult population—within a single week.

South Korean regulators attributed the instability to leveraged ETFs introduced earlier in the year, which forced position liquidations as prices fell. Lee Chan-jin, Governor of the Financial Supervisory Service, described these leveraged ETFs as a "gambling operation" and noted that the ETFs themselves were driving market swings.

Despite the local volatility, the company maintains strong fundamentals driven by AI infrastructure demand. SK Hynix holds approximately 58% of the global high-bandwidth memory (HBM) revenue as of Q1 2026 and reported a record $33 billion operating profit for FY2025. The company recently listed American depositary receipts on the Nasdaq under the ticker SKHY.

The firm's growth is heavily tied to the United States, which accounts for 65% of its revenue. While a partnership with Nvidia contributes 24% of total 2025 sales, analysts have flagged this concentration as a potential risk.