A quick update on last week’s article about single-stock levered ETFs. In the article, we discussed the potential dangers of these financial instruments and how they play no role in an individual investor’s portfolio. Shortly after publication, we learned how quickly things can go sideways in such an investment.
In April 2025, Granite Shares launched a leveraged single-stock ETF (LCDL) that provided 2x leveraged exposure, less fees and expenses, to the daily price movement of Lucid Group (LCID) shares. On July 14, 2026, the share price of Lucid Group, Inc. declined intraday by more than 50% from the previous day's closing price.
In accordance with the Fund's governing documents and the terms of its swap agreements, the swap counterparty exercised its contractual right to close out the swap position after the intraday decline. On July 14, 2026, the ETF's per-share value fell to approximately -$0.016. This negative NAV resulted in a $0 return for investors upon liquidation.
This comes while South Korea's financial regulator stopped new listings of single-stock leveraged ETFs and increased the minimum deposit requirement to 30 million won after the Kospi index dropped roughly 26% from its June high. These ETFs, which provide double the daily returns of Samsung Electronics and SK Hynix shares, along with the two chipmakers, represent over 70% of total trading value in the Korean market.
These single-stock leveraged exchange-traded funds, which debuted in May and aim to double the daily performance of Samsung Electronics and SK Hynix, hit the market as excitement for Korean stocks was hitting a peak. They have drawn flak for intensifying volatility in the nation's top AI-related equities.
As we mentioned in our article, investors’ understanding of the risks associated with these funds and the method in which returns are generated is extremely limited. They should never have been offered to individual investors and are another sad story where money can be made, the financial markets will ignore basic risks and dive in headfirst.
In April 2025, Granite Shares launched a leveraged single-stock ETF (LCDL) that provided 2x leveraged exposure, less fees and expenses, to the daily price movement of Lucid Group (LCID) shares. On July 14, 2026, the share price of Lucid Group, Inc. declined intraday by more than 50% from the previous day's closing price.
In accordance with the Fund's governing documents and the terms of its swap agreements, the swap counterparty exercised its contractual right to close out the swap position after the intraday decline. On July 14, 2026, the ETF's per-share value fell to approximately -$0.016. This negative NAV resulted in a $0 return for investors upon liquidation.
This comes while South Korea's financial regulator stopped new listings of single-stock leveraged ETFs and increased the minimum deposit requirement to 30 million won after the Kospi index dropped roughly 26% from its June high. These ETFs, which provide double the daily returns of Samsung Electronics and SK Hynix shares, along with the two chipmakers, represent over 70% of total trading value in the Korean market.
These single-stock leveraged exchange-traded funds, which debuted in May and aim to double the daily performance of Samsung Electronics and SK Hynix, hit the market as excitement for Korean stocks was hitting a peak. They have drawn flak for intensifying volatility in the nation's top AI-related equities.
As we mentioned in our article, investors’ understanding of the risks associated with these funds and the method in which returns are generated is extremely limited. They should never have been offered to individual investors and are another sad story where money can be made, the financial markets will ignore basic risks and dive in headfirst.
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