The Korea Exchange has postponed the launch of weekly single-stock options on four major companies, citing extreme market volatility that has characterized South Korea's equity market this year. Originally set for June 29, the derivatives were tied to Samsung Electronics, SK Hynix, Hyundai Motor, and LG Energy Solution. The decision comes after the market experienced an 8% single-day drop followed by an 8% rebound, highlighting the frothy conditions driving the world's best-performing major index.

Regulatory concerns intensified after the head of South Korea's Financial Supervisory Service expressed regret over leveraged exchange-traded funds linked to Samsung and SK Hynix. These products have attracted retail investors chasing the AI-driven rally, with Samsung shares doubling and SK Hynix shares quadrupling since January. However, some leveraged ETFs have shown disconnect from underlying stocks, with the ACE SK Hynix fund surging 50% while the stock fell 7.7% on June 8 due to liquidity issues.

The frothy environment has pushed the Kospi's volatility gauge to a record 95, while margin debt reached Won37tn ($24bn). Retail participation has exploded, with half of South Korea's adult population now holding brokerage accounts compared to just 21% in 2019. This surge has raised concerns about systemic risk in what was already a highly concentrated market.

Despite the delay, both SK Hynix and Kioxia are pursuing US listings to tap international investor demand. The exchange indicated it would proceed with single-stock options after reviewing market conditions and institutional readiness, though timing remains uncertain given the ongoing volatility.