Betting on a Korean Housing Bubble Collapse — Would Love to Hear Your Thoughts

Hey everyone,

I’ve been doing a lot of research over the past few months and would love to have a discussion here to pressure-test my thinking.

The core of my thesis is simple:
• South Korea has experienced massive housing price inflation post-COVID, with household debt to GDP ratios among the highest globally (~100%+).
• The economy is heavily construction- and real estate-dependent, magnifying the systemic risk.
• Korean mortgages are primarily floating-rate, making households highly sensitive to rising interest rates.
• Government intervention and opacity have delayed pain, but they can’t prevent it indefinitely. Transparency issues make it hard for most Koreans to gauge risk.
• If and when a correction comes, the impact on banks, construction companies, and the broader economy could be significant.

How I’m expressing this view:
• I bought long-dated put options on EWY (iShares South Korea ETF), expiring January 2026.
• Strike price: $40
• Average premium: $1.16 per contract
• Position size: 26 contracts (about $3,000 at risk total)
• Breakeven at expiration: EWY ~$38.10

Risk/Reward profile:
• Maximum loss: Premium paid (~$3,000)
• Potential upside: 5–10x if EWY drops to $25–30 levels
• Thesis horizon: Next 18–24 months

Why I’m posting:

I know macro timing is difficult—even if I’m “right,” things could take longer or not play out as expected.

I’d love to hear:
• Are there flaws in my thesis I’m overlooking?
• How realistic is it to expect a sharp collapse vs a slow bleed?
• Would you express this view differently (e.g., higher strike? or a different vehicle?)

Thanks in advance — I am excited to discuss this!