The Exchange Will Also Enable ‘After-Work Stock Trading’ Starting on the 14th, Intensifying After-Market Competition

[Financial News] Korea Exchange (KRX) will launch an after-hours market on the 14th, allowing real-time stock trading from 4 p.m. to 8 p.m. As the exchange introduces real-time trading after regular working hours, competition in the after-hours market led by alternative trading platform NextTrade (NXT) is expected to intensify in earnest.
According to Korea Exchange on the 11th, the after-hours market launching on the 14th will operate for four hours, from 4 p.m. to 8 p.m. Unlike the existing after-hours single-price trading session, which operated from 4 p.m. to 6 p.m. after the regular market closed, orders will be executed in real time. Accordingly, the existing after-hours single-price trading session will be abolished.
Most stocks listed on the KOSPI Composite Index and KOSDAQ (Korea Securities Dealers Automated Quotations), as well as depositary receipts (DRs), will be eligible for after-hours trading, excluding investment-warning stocks, stocks undergoing liquidation trading, and other securities requiring market management. The same price fluctuation limit as in the regular session—±30% of the previous day’s closing price—will apply.
However, exchange-traded funds (ETFs) and exchange-traded notes (ETNs) will be excluded from trading to account for market volatility.
The exchange’s after-hours market will open 20 minutes later than NXT, which operates from 3:40 p.m. to 8 p.m., but it will cover a broader range of securities.
While NXT allows trading in 600 securities, the exchange will offer trading in most stocks listed on the KOSPI Composite Index and KOSDAQ. This will give investors an opportunity to trade at night in securities that were previously unavailable on NXT.
NXT will compete through lower costs and its first-mover advantage. Its trading fees are about 30% lower than those of KRX, and it has already built up investors’ experience using the service by operating both pre-market and after-hours markets. Its challenge will be to retain existing users’ orders while preserving liquidity in major actively traded securities.
Because Korea Exchange and NextTrade will both operate after-hours markets during the same period, from 4 p.m. to 8 p.m., investors can choose which market they want to use.
If an investor does not designate a specific market, the brokerage will submit the order to the market that is more favorable to the investor, considering the likelihood of execution and the total amount under best-execution standards.
KRX plans to continue monitoring global exchanges’ moves to extend trading hours and consider expanding its trading hours in stages. The exchange had initially aimed to launch pre-market and after-hours markets by the end of June, but adjusted the schedule after reflecting industry feedback, deciding to open only the after-hours market first on the 14th.
[email protected] Joo Won-gyu Reporter