Investment banks are offloading their exposure to leveraged single-stock ETFs by selling exotic derivatives called “crash puts” to hedge funds and institutional investors willing to bet that the worst won’t happen. For the counterparties willing to absorb that tail risk, the premiums are generous. To manage this exposure, banks have turned to over-the-counter products including crash puts, cliquets, and stability notes. South Korea has been ground zero for this trend, with retail investors piling into single-stock leveraged products tied to domestic semiconductor giants. The enthusiasm got intense enough that South Korean regulators stepped in, imposing stricter limitations on retail access to leveraged ETFs.