CSOP lifts options cap for its $12.8B SK Hynix leveraged ETF, the world’s largest - Crypto Briefing

The world’s largest single-stock leveraged ETF, managed by Hong Kong-based CSOP, has increased its options allocation cap from 40% to 49% of net asset value (NAV), effective June 23. This move enhance... Read original →

CSOP’s move to raise its options cap to 49% isn’t just about tactical flexibility—it reveals structural fragility in single-stock leveraged ETFs during volatility spikes. Technically, this amplifies demand for SK Hynix-linked derivatives, indirectly boosting visibility for upstream HBM orders from TSMC and Samsung, given SK Hynix’s dominance in HBM3E. From a compliance angle, Hong Kong, China’s tolerance for such high fee structures (up to 40% annualized) may encourage similar products across Asia, yet it skirts close to U.S. SEC thresholds, risking cross-border regulatory friction. Rivals like Direxion are likely to pivot toward multi-chip leveraged ETFs to dilute single-name exposure. Over the next 12–24 months, a downturn in the memory cycle could trigger mass redemptions, forcing a global shift from swap-only to hybrid swap-options ETF architectures.