◆Ajou Economic News
▷"Retail investors hit hard by market drop"…margin debt falls by half in a month
- According to the Korea Financial Investment Association, as of July 23, the margin debt for securities trading was recorded at 9.454 trillion won. This marks the first time margin debt has fallen below 10 trillion won since April 23, when it was 9.966 trillion won.
- The recent fluctuations in the stock market have led investors to increase their cash holdings rather than engage in aggressive trading through margin transactions. The KOSPI index rose to 9114.55 on June 22, only to plummet by 9.99% the following day on June 23.
- Margin trading allows investors to buy stocks using borrowed funds from brokerage firms, with payment due by a specified deadline. If investors fail to pay by the deadline, the brokerage firm may forcibly sell the stocks in a process known as a reverse transaction.
- The increased burden of reverse transactions has also contributed to the recent decline in margin debt. On July 9, out of 14.322 trillion won in margin debt, 1.422 trillion won resulted in actual reverse transactions, raising the proportion of reverse transactions to 10.2%. However, since then, margin trading has sharply decreased, leading to a rapid reduction in the scale of reverse transactions.
◆Major Reports
▷Investing in Covered Call ETFs During High Volatility [NH Investment & Securities]
- The global options strategy ETF market continues to grow, particularly around covered call ETFs.
- The total net asset value of domestic covered call ETFs exceeds 25 trillion won. In a bullish phase of the domestic stock market, the net asset value of covered call ETFs investing in domestic stocks has surged. Recently, active covered call ETFs have also gained prominence.
- The key factor influencing the performance of covered call ETFs is the direction of the underlying asset's stock price. Meanwhile, domestic high-dividend covered call ETFs have underperformed due to relatively low stock returns of high-dividend stocks, despite a surge in the KOSPI 200, which serves as the underlying asset for sold call options. The mismatch between held stocks and the underlying assets of call options should also be considered a risk factor.
- Domestic covered call ETFs, such as KODEX 200 Target Weekly Covered Call, offer attractive high dividend yields and tax benefits on option premiums. However, strategies need to be developed considering relatively high stock price volatility. Active covered calls like TIGER Dividend Covered Call Active and KODEX 200 Covered Call Active may serve as alternatives to reduce volatility.
◆Key Announcements After Market Close (July 27)
△IBK, Q2 operating profit of 915.1 billion won…down 1.3% from last year
△iM Securities Q2 operating profit of 27.5 billion won…down 16.3% from last year
△Doosan Enerbility Q2 operating profit of 314.3 billion won…up 16% from last year
△Hanwha Ocean Q2 operating profit of 736.1 billion won…up 98% from last year
△LG Innotek Q2 operating profit of 245.8 billion won…up 2057.3% from last year
◆Fund Trends (as of July 24, excluding ETFs)
▷Domestic equity funds: 21.984 trillion won
▷Overseas equity funds: 3.316 trillion won
◆Today's Key Schedule
▷South Korea: Consumer Confidence Index (July)
▷United States: Housing Price Index (May), Consumer Confidence Index (July)
* This article has been translated by AI.
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