Two SK Hynix Leveraged ETFs to Liquidate Amid Cooling AI Trading
Tradr ETF is liquidating two leveraged ETFs linked to SK Hynix—SKHA (2x long) and SKHN (2x short)—around November 12, just months after their US launch in July. This development highlights the rapid cooling of investor enthusiasm and high volatility in AI-related financial products as market sentiment shifts. It underscores the risks associated with specialized leveraged trading instruments that amplify single-stock daily movements. Since their July listing, the combined assets of both ETFs plummeted by over 60% down to approximately $1.3 million. The long ETF fell over 5% while the short ETF plunged 42%, reflecting extreme turbulence in AI chip stocks.
## BACKGROUND
Leveraged ETFs are financial derivatives designed to multiply the daily returns of an underlying asset, while American Depositary Receipts (ADRs) allow foreign company shares to be traded on US stock exchanges. Both tools are frequently used by short-term traders to capture fast market movements, though they carry substantial volatility risks over longer holding periods.