Korea Exchange to extend trading until 8 pm
The Korea Exchange office in Seoul / Yonhap
The Korea Exchange (KRX) will launch an after-market trading session on Sept. 14, allowing investors to trade stocks in real time until 8 p.m. after the regular market close.
The move is aimed at expanding trading opportunities for domestic investors and responding to moves by major U.S. exchanges to extend trading hours, the bourse operator said Wednesday.
Under the current system, which will be abolished, after-hours trades are executed at 10-minute intervals using a single price auction mechanism between 4 p.m. and 6 p.m. The market will shift to continuous trading between 4 p.m. and 8 p.m., as in the regular session, with trades executed in real time whenever buy and sell orders match.
In consideration of potential market volatility, exchange-traded funds (ETFs) and exchange-traded notes (ETNs) will initially be excluded from trading. The KRX plans to review whether to allow trading in ETFs and ETNs after assessing market stability and liquidity.
Only limit orders will be allowed, while market orders will not be accepted. The same daily price limits as during the regular session — 30 percent above or below the previous day's closing price — as well as volatility interruption mechanisms will apply.
By extending trading hours, investors will be able to reflect information released after the regular market close in stock prices, according to the KRX.
So far, after-market trading on Nextrade, an alternative trading system in Korea, has been limited mainly to large-cap stocks. The KRX after-market session will cover all listed stocks except securities that require special market oversight.
The KRX had initially aimed to launch both pre-market and after-market sessions by the end of June but revised the plan in response to industry feedback.
"We will continue to monitor moves by major global exchanges to extend trading hours and consider further, phased extensions of trading hours as part of efforts to strengthen the competitiveness of Korea’s stock market infrastructure," the KRX said.