The Financial Supervisory Service and Korea Exchange, along with alternative trading system NextTrade, noted that shortly after the Pre-Market (8 a.m. to 8:50 a.m.) opens, the initial prices have repeatedly hit upper and lower limits (the maximum and minimum price limits) only through odd lot orders.
Most cases of sharp price fluctuations in the Pre-Market are attributed to one-off orders from investors who are still unfamiliar with the price determination method in the Pre-Market. However, there have also been cases where multiple upper or lower limit quotes were repeatedly submitted and executed from specific accounts.
The FSS and the exchange noted that if the problem of price fluctuations in the Pre-Market continues, it could distort market prices, leading to losses due to price illusion effects and trend trading.
Even small orders can become market surveillance targets if they are deemed to have an unjust impact on the market price, leading to preventative measures. Preventative measures progress from a verbal warning from the securities company to a written warning, a notice of refusal to handle, and ultimately refusal to handle. In severe cases, it may lead to punishment for market disruption or price manipulation.
The Financial Supervisory Service and the exchange have decided to thoroughly investigate signs of abnormal pricing due to multi-market transactions and to initiate investigations into unfair trading practices related to repeated market disruptions.