SEOUL: South Korean investors and bankers, who have bet on low volatility in global stocks over the recent years, now face increasing risks of losses from complex equity-linked notes.
About 9.6 trillion won (US$8bil) of outstanding equity-linked securities sold by Korean issuers will incur a loss if the underlying Kospi 200 Index falls between 40% and 60%, according to data from Korea Securities Depository (KSD). Issuers that intended to receive a premium by selling put options could also suffer losses from their bets given the market slump.
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