South Koreans Bet Against Oil at $100 Amid Geopolitical Risks
South Korean retail investors are taking a contrarian stance on oil prices, betting that they will soon decline despite recently reaching a $100-per-barrel high. Between the 1st and October 10th, these investors net purchased ₩41.8 billion (approximately $31.2 million) worth of inverse crude oil products, specifically the 'KODEX WTI Crude Oil Futures Inverse(H)' ETF.
This product tracks the daily return of an index based on West Texas Intermediate (WTI) futures at a -1x multiple, generating gains when WTI prices fall. Another inverse product, 'Samsung Bloomberg Inverse 2X WTI Crude Oil Futures ETN B', also saw significant buying, with ₩28.8 billion (approximately $21.5 million) invested.
These purchases suggest that retail investors are positioning for a potential correction in oil prices, possibly driven by profit-taking or an easing of geopolitical risks. WTI-linked products are the only commodity ETFs listed in South Korea, and their buying activity indicates investor sentiment has tilted toward a downside reversal rather than continued gains.