Investors claim losses on suspension of daytime trading for US stocks
An electronic signboard shows news related to the U.S. in a dealing room of KB Kookmin Bank in Seoul, Monday. Yonhap
Korean investors who attempted daytime trading for U.S. stocks faced abrupt cancellations, Monday, following requests from Blue Ocean, an alternative trading system (ATS) in the U.S. that offers the service to domestic brokerage firms.
The daytime trading service in Korea allows trading of U.S. stocks from 9 a.m. to 4:30 p.m. via domestic brokerage firms' apps, in cooperation with Blue Ocean.
According to industry sources, the daytime trading service of all domestic securities firms was completely suspended at 2:45 p.m. following Blue Ocean's request. Transactions executed after this time were uniformly canceled, nullifying any resulting losses or profits.
It occurred due to an overwhelming influx of sell orders at Blue Ocean, the ATS handling local transactions in the U.S. Most securities firms completed the cancellation process before the opening of the U.S. regular trading session at 10:30 p.m. (KST), and resumed U.S. stock trading services.
However, customers of three securities firms — NH Investment & Securities, Samsung Securities and KB Securities — were unable to trade stocks even after the market opened. Normal trading resumed late at night or early the following morning.
"The process is taking time," NH Investment & Securities noted at the time.
Overseas stock investors claim they suffered losses because they were unable to place orders in a timely manner amid the volatile market conditions.
"During a market crash like Monday's, my trading in NH Investment & Securities was halted for 8.5 hours from 5 p.m. to 1:30 a.m.," an online user wrote. "Timing is crucial, and I missed all my trading opportunities. What's the point of converting currency if I can't trade? I am extremely frustrated."
Some users of the three firms have created an online group chat to discuss filing complaints with the Financial Supervisory Service and seeking group compensation for their losses.
Continuing on Tuesday, domestic securities firms decided to suspend daytime trading. According to the firms, Blue Ocean informed them that they decided not to initiate service to address the system issues that occurred the previous day. The restart time is yet to be determined.
The volume of daytime trading has been growing rapidly each year. For instance, Samsung Securities, the first to launch such service, reported that daytime trading accounted for about 15 percent of its total overseas stock trading volume, amounting to 3.1 trillion won ($2.2 billion).