South Korean Retail Investors Bet Against Surging Oil Prices
Retail investors in South Korea have been betting against surging oil prices by buying inverse exchange-traded funds and notes that track minus one times the daily return of an index based on West Texas Intermediate crude futures. This move suggests they expect a correction ahead rather than further gains.
The KODEX WTI Crude Oil Futures Inverse (H) saw net purchases of 49 billion won ($34 million), ranking 10th among all domestically listed ETFs by retail net buying, between the 1st and 11th of this month. Double-leveraged inverse products also drew buying, with individuals net purchasing 31.8 billion won of the Samsung Bloomberg Inverse 2X WTI Crude Oil Futures ETN B over the same period.
The combined net buying of the two products reached 80.8 billion won, with investors buying 26.82 million units of the KODEX WTI Crude Oil Futures Inverse (H) and 15.41 million securities of the Samsung Bloomberg Inverse 2X WTI Crude Oil Futures ETN B.
International oil prices surged, with Brent crude for November delivery settling at $101.21 a barrel on the ICE Futures Europe exchange in London overnight, up 3.36% from the previous session and the highest close since May 22 this year. WTI for October delivery rose 3.25% to $96.05 a barrel.