South Korea mandates 5 days of paper trading for leveraged ETF investors after 90% volume crash

South Korea’s financial regulators just told retail investors to practice before they play for real. Starting August 19, 2026, first-time individual traders who want to buy single-stock leveraged and inverse ETFs or ETNs on the Korea Exchange will need to complete five days of paper trading first, logging at least one hour per day for a total of five hours of simulated activity. The reason is about as subtle as a sledgehammer. Trading volumes in leveraged products tied to companies like Samsung Electronics and SK Hynix have cratered by 90%, and retail investors have racked up losses estimated in the trillions of won. South Korean financial officials have publicly apologized for the damage. How the leverage party got out of hand Single-stock leveraged ETFs and ETNs were introduced on the Korea Exchange in late May 2026. These products amplify daily returns on individual stocks, typically by 2x, meaning a 3% gain becomes a 6% gain and a 3% loss becomes a 6% loss. Retail investors piled in almost immediately, particularly around semiconductor heavyweights Samsung Electronics and SK Hynix. What followed were extreme market swings that regulators have compared to the meme-stock frenzy t...