The Korea Exchange (KRX) implemented extended stock trading hours, allowing continuous trading until 8 p.m. after the regular market close, effective September 14th. This move replaces the previous 4 p.m. to 6 p.m. after-hours system, which used a single-price auction mechanism, with real-time continuous trading, similar to regular sessions. The primary goals are to expand trading opportunities for domestic investors and to make the Korean market more responsive to global market developments, especially as major U.S. exchanges consider 24-hour trading.
The new system means that corporate disclosures released between the regular market close and 6 p.m. can be immediately reflected in stock prices through after-market real-time trading, addressing the previous limitation where investors had to wait until the next day. The KRX also aims to attract more foreign investment, drawing parallels to the Nextrade platform, which saw foreign investor participation rise from less than 5% to about 14% after its launch. Extended trading hours could also enable foreign investors to trade Korean stocks alongside real-time currency transactions, potentially helping to stabilize the won.
However, some industry officials express skepticism, noting that extended hours typically involve thinner liquidity and wider bid-ask spreads, which might deter institutional foreign investors who prioritize liquidity. Exchange-traded funds (ETFs) and exchange-traded notes (ETNs) are initially excluded from the extended trading due to concerns about potential market volatility, with a review planned after market stability is assessed. Only limit orders are permitted, and the price fluctuation limit remains the same as regular hours, at 30% up or down from the day's base price. The settlement date for trades in the after-market is T+2 days, consistent with regular trading hours.
