Global asset managers are accelerating efforts to capture major "big fish" before they even debut on stock markets. Competition to launch leveraged and inverse ETFs based on mega-cap unlisted big tech companies such as OpenAI and SpaceX is intensifying, heating up the single-stock derivatives market.
According to the investment industry on the 14th, UK-based leveraged products specialist Leverage Shares has filed a securities registration statement with the U.S. Securities and Exchange Commission (SEC) to launch leveraged and inverse ETFs based on ChatGPT developer OpenAI. OpenAI, expected to go public as early as the second half of this year, is valued at approximately $500 billion (about 660 trillion won).
The aggressive moves don't stop there. ProShares has also filed for 26 products in bulk, including 2x leveraged ETFs targeting unlisted AI and platform companies such as OpenAI, Elon Musk's SpaceX, Anthropic, and ByteDance. The strategy leverages the U.S. system that allows registration filings before IPO dates and offering prices are finalized, aiming to capture investment demand immediately following IPOs.
Single-stock leveraged ETFs have surged in popularity as short-term trading vehicles for retail investors seeking volatility since they were first permitted in the U.S. in 2022. However, as proposals for ultra-high-risk products with 4x to 5x leverage have emerged recently, the SEC has tightened regulations, including temporarily suspending new product reviews. The nature of leveraged products means investment principal can evaporate rapidly when underlying asset prices swing sharply.
Korean financial authorities are also closely monitoring these global trends and reviewing measures to cap leverage ratios at the current 2x limit for investor protection.
An industry official advised, "While expectations for unlisted big tech are high, volatility can be extreme immediately after listing, so this is a time when risk management should accompany any illusions about growth potential."