Hong Kong’s Day Traders Chase Leveraged ETFs After US Tech Boom

(Bloomberg) — When Pat Miao walked away from her Hong Kong office job this summer, she gained something else: time to trade in one of Wall Street’s wildest corners. The 30-year-old now wagers on funds that offer double or triple the daily returns of popular US tech stocks such as Tesla Inc.

Leveraged exchange-traded funds, once the preserve of professional speculators given their ability to amplify both gains and losses, are gaining traction among retail investors in Hong Kong. While some, like Miao, trade US-based products, a new rule allowing listings of amplified single-stock wagers in the city — a first in Asia — has made it easier to access turbocharged products tracking names at the heart of the US equity rally.

The wave of new launches reflects issuers responding to that demand: So far this year, more than a dozen new single-stock leveraged ETFs have launched in Hong Kong, data compiled by Bloomberg show, compared with just three linked to indexes in 2024 and none in 2023. On trading platform Moomoo, US-listed funds like the ProShares UltraPro QQQ (ticker TQQQ) and the Direxion Daily TSLA Bull 2X Shares (TSLL) consistently rank among the most-traded securities for Hong Kong investors. SQQQ, a Nasdaq 100-focused 3x inverse ETF, finds itself not far behind.

“What drew me in was the potential to supercharge returns, especially when vanilla index gains felt underwhelming,” Miao said. “Volatility comes with the territory, but I’m comfortable holding if I believe in the long-term story.”

Trading activity has surged in Hong Kong. Total value traded in leveraged and inverse ETFs has reached $80 billion, a more than 60% jump from the same period last year, Bloomberg-compiled data shows.

At the same time, net flows have been muted: investors have pulled more than $284 million from the high-octane universe, more than double last year’s outflows and a sharp reversal from the $533 million of inflows seen in 2023, according to data analyzed by Bloomberg Intelligence’s Andre Yapp. Such whipsawing flows are typical during bouts of volatility like this year’s tariff-fueled market angst, while net allocations remain below the unprecedented boom of the pandemic years.

“Short-term trades are now the name of the game,” said Kenny Ng, strategist at China Everbright Securities International. “To chase sharper returns and capitalize on quick moves, they’re leaning into leveraged and inverse products, zeroing in on high-liquidity, large-cap names and major indexes.”

Single-stock ETFs have long been popular with US traders. Issuers in Hong Kong are hoping the new offerings — enabled by the rule change in the first quarter — will capture speculative attention, moving beyond the index-wide wagers that previously dominated the market. In South Korea, the retail crowd is known for its obsession with such products to bet on the biggest tech stocks and, more recently, crypto-related stocks.