The South Korean watchdog has issued a consumer warning regarding leveraged WTI crude oil futures ETNs. The country’s retail investors are expecting a rebound in oil prices and are increasingly opting for leveraged investments linked to the commodity.

The Financial Supervisory Service (FSS) of South Korea has issued a ‘high risk’ consumer alert warning investors about the risk of losses due to the increasing gap between the index value of leveraged exchange-traded notes (ETNs) linked to WTI crude oil futures and the market price. According to the FSS Financial Product Analysis Lab, the liquidity supply function of ETNs is not ‘functioning smoothly’ with the gap rate recently rising up to 95.4%. The Korean Stock Excha

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