As the KOSPI plunged more than 5% intraday on the 10th, a sidecar—temporary suspension of program sell quotes—was triggered. The move came a day after a buy sidecar was activated on a sharp KOSPI rally.
According to the Korea Exchange (KRX), at about 1:16 p.m. the effectiveness of program sell quotes was suspended for five minutes following a sharp drop in the KOSPI200 futures index. At the moment of activation, the KOSPI200 futures index was at 1,223.15, down 64.65 points (5.02%) from the previous trading day.
A sidecar is a system that restricts program trading quotes for five minutes if the KOSPI200 futures price rises or falls 5% or more from the prior close for one minute. In a surge, buy quotes are temporarily suspended; in a plunge, sell quotes are temporarily suspended.
The domestic stock market has recently seen extreme volatility. On the 1st, a buy sidecar was activated on the KOSPI, followed by sell sidecars on the 5th and 8th, and another buy sidecar the previous day. The sell sidecar on this day was the 12th this year and came two trading days after the 8th.
As of 1:39 p.m., the KOSPI was down 489.76 points (6.05%) at 7,607.17 from the previous trading day. The index started the day at 7,899.77, then gradually widened losses and slipped to the 7,600 level intraday.