Starting on the 14th, office workers will be able to freely trade domestic on-exchange stocks even after work hours.
With the ability to trade stocks in real time from 4–8 p.m., competition with the alternative trading system (ATS) NEXTRADE (NXT) is expected to intensify.
According to the Korea Exchange (KRX) on the 11th, to greatly expand trading opportunities for domestic stock investors and to revitalize the market, it plans to officially launch an "after market" operating from 4–8 p.m. starting on the 14th.
The existing post-close single-price session (4–6 p.m.) will be abolished, shifting to a structure where orders are executed in real time. The Korea Exchange (KRX) plans to apply the same price limit as the regular session (previous day's closing price ±30%) to the after market.
Most stocks and depository receipts (DR) on the KOSPI and KOSDAQ markets, except those requiring market oversight such as investment warning issues and issues under liquidation trading, will become tradable.
With the KRX opening the after market, full-fledged competition with the existing NTX is also expected to heat up. The market is watching whether the head-to-head matchup between the two trading venues will lead to lower fees and better services, improving investor convenience.
The first difference investors will notice is the "size of the tradable universe." In the case of the alternative trading venue NEXTRADE (NXT), the number of currently tradable issues is limited to around 600.
By contrast, the KRX after market opening this time is expected to include most issues listed on the stock market (KOSPI) and KOSDAQ as tradable. For individual investors looking to trade small and mid-caps or a wide range of issues, using the KRX after market may be advantageous.
However, NTX is relatively competitive in terms of fees and trading convenience. Trading fees are about 30% lower than KRX, and it has already built experience with the premarket and after market.
For the time being, however, trading of exchange-traded funds (ETF) and exchange-traded notes (ETN) in the night session is expected to be difficult. Although introducing ETF and ETN trading during nighttime hours had been pursued, the start of ETF and ETN trading on the KRX and NTX night sessions has been deferred due to reasons such as investor protection and checks on market volatility.
If nighttime stock trading using after-work hours becomes active, investors will be able to respond immediately to volatility in overseas markets or major corporate disclosures that occur in the evening. As competition among exchanges intensifies, it will be advantageous to accurately identify in advance each exchange's features and whether it supports specific issues to craft trading strategies.