Woofun AI reports that derivatives strategist Gordian Schneider has issued a stark reality check regarding the performance of 2x leveraged exchange-traded funds tracking Samsung Electronics and SK Hynix. According to analysis published on Smartkarma, these leveraged products would need to appreciate by approximately 33% to return to their valuation levels as of June 22. This recovery threshold implies that the underlying equities must rebound by roughly 16.5%, a significant hurdle given recent market dynamics.

The urgency of this assessment follows a sharp downturn on Tuesday, where shares of both Samsung Electronics and SK Hynix declined by double digits, dragging related ETFs down nearly 25%. Since its launch on May 27, the Samsung 2x leveraged ETF has already accumulated a loss of 5.4%. Schneider emphasizes that while these newly launched single-stock leveraged ETFs in South Korea can amplify returns during trending markets, their value erodes rapidly during periods of high volatility. Consequently, they are deemed suitable primarily for short-term tactical momentum investing rather than long-term holdings.