"Is It Still NextTrade?" ... A 1.5 Trillion-Won Gap with NextTrade (NXT) in KRX After-Market's First Week

[Financial News] The Korea Exchange (KRX) has launched its after-market, but the hurdle posed by existing NextTrade (NXT) remains high. KRX sought to gain an edge by allowing trading in every stock listed on the domestic market, but its later opening time and the lack of order continuity between the regular session and after-market have created a gap.
According to KRX on the 20th, the KRX after-market recorded total trading value of 5.738 trillion won during the week from the 14th through the 18th. Over the same period, the NXT after-market recorded 7.236 trillion won, about 1.498 trillion won more than KRX. On a daily average, KRX recorded 1.1476 trillion won and NXT 1.4472 trillion won, a difference of approximately 299.6 billion won.
Except for the first day, the KRX after-market recorded lower trading value than NXT for four consecutive trading days. Specifically, KRX led by 28.1 billion won on the 14th, but NXT recorded higher trading value on the 15th by 191.3 billion won, the 16th by 461.9 billion won, the 17th by 297.2 billion won, and the 18th by 575.6 billion won.
Although KRX launched its after-market touting "trading in every stock on the Korea Exchange Main Board and KOSDAQ," NXT remains ahead for now. The result is attributed to the recent concentration of trading in major large-cap stocks. Since NXT's eligible stocks consist of major, highly liquid names, analysts say the larger number of tradable stocks on KRX has not served as a significant differentiator.
In fact, on the 15th, trading volume in the KRX after-market reached 61.11 million shares, nearly seven times NXT's 8.89 million shares. However, trading value stood at 1.0073 trillion won for KRX and 1.1987 trillion won for NXT, giving NXT a lead of 191.3 billion won. KRX's trading volume that day consisted of 12.63 million shares on the Korea Exchange Main Board and 48.48 million shares on KOSDAQ, while trading value was 596.3 billion won on the Korea Exchange Main Board and 411 billion won on KOSDAQ. The Korea Exchange Main Board had the higher trading value.
The continuity of regular-session orders has also been identified as a major factor. KRX currently does not carry the validity of regular-session orders over into the after-market, whereas orders submitted during the regular session on NXT continue into the after-market. In addition, KRX's after-market opens at 4 p.m., while NXT's opens 20 minutes earlier, at 3:40 p.m.
Unless investors designate an exchange directly, securities firms execute orders on the relatively more favorable market after considering factors such as the likelihood of execution. As a result, NXT's earlier opening is currently absorbing all orders submitted just before the regular session closes.
KRX is starting with a three-board system divided into the pre-market, regular session, and after-market. Ultimately, however, it plans to introduce the One Board system, a single integrated platform. As a first step, it is working to link the regular session and after-market by the end of next year. NXT currently uses the One Board system.
A KRX official said, "We are currently pursuing measures such as extending trading hours before and after the regular session in stages. Since an environment that allows for greater flexibility can be established only after the One Board system is built, we are working to complete the system by the end of next year," adding, "Whether to extend after-market hours or introduce a pre-market will be decided separately after monitoring the situation." 
[email protected] Lim Sang-hyuk Reporter