With the domestic stock market rebounding more than 5% in a day, buy-side sidecars were triggered simultaneously on the KOSPI and KOSDAQ markets. Recently, the domestic market has been in a roller-coaster pattern, with sell-side sidecars when it plunges and buy-side sidecars when it surges.
Analysts said volatility has become extremely elevated as leveraged funds and program trading centered on semiconductor stocks expanded and major events overlapped, including U.S.-Iran tensions and investment prospects for artificial intelligence (AI).
Korea Exchange (KRX) said it triggered a temporary suspension of the effectiveness of program buy orders (buy-side sidecar) on the stock market at 12:54:55 p.m. on the 10th. It was the 17th KOSPI buy-side sidecar this year.
At the time of activation, the KOSPI 200 futures price was 1240.15, up 5.13% from the previous trading day. A KOSPI buy-side sidecar is triggered when the KOSPI 200 futures price has risen 5% or more from the previous day for at least one minute, and the effectiveness of program buy orders is suspended for five minutes.
At 1:28 p.m. that day, the KOSPI was at 7680.48, up 388.57 points (5.33%) from the previous trading day.
A sidecar was also triggered on the KOSDAQ. Korea Exchange (KRX) activated a temporary suspension of the effectiveness of program buy orders (buy-side sidecar) on the KOSDAQ market at 1:08:48 p.m.
At the time of activation, KOSDAQ 150 futures were 1487.40, up 6.04% from the previous trading day. As of 1:28 p.m., the KOSDAQ index was 844.39, up 50.39 points (6.35%).
This year, the domestic stock market has shown extreme volatility, with sidecars and circuit breakers being triggered in succession.
On the stock market, as of the day, buy-side sidecars had been triggered 17 times and sell-side sidecars 17 times, for a total of 34. That far exceeded last year's full-year figure of three and has already surpassed the 26 recorded in 2008 during the global financial crisis.
On the KOSDAQ as well, with an additional buy-side sidecar that day, a total of 19 sidecars (12 buy, 7 sell) have been triggered this year. That matches the all-time high set in 2008.
Experts point to the expansion of single-stock leveraged ETFs and the increase in program trading as reasons sidecars have been frequent this year. They said leveraged investments such as margin trading and CFDs are also amplifying volatility as the cash and futures markets, centered on semiconductor stocks, swing sharply at the same time.
They also noted that external variables—including the AI investment debate, major corporate earnings, U.S. Federal Reserve policy, and Middle East risks—are overlapping, causing the market to repeatedly surge and plunge within a single day.
Lee Young-won, a researcher at Heungkuk Metaltech Securities, said, "There are multiple reasons for the surging volatility and steep declines, and external factors such as renewed tensions between the United States and Iran and a rebound in oil prices are adding pressure," adding, "Amid repeated spikes and crashes, both KOSPI and KOSDAQ are undergoing steep corrections."