As Korea Exchange (KRX) opened the After Market for the first time on the 14th, allowing real-time stock trading from 4 p.m. to 8 p.m. after the regular session ended, sharp price swings have followed, centered on some individual stocks.
Although the 10-minute batch-matching "off-hours single-price" system was abolished and a real-time continuous trading system, like the regular session, was introduced, the thin order book and lack of liquidity unique to after-hours trading have combined to produce a market of sharp rises and falls.
The most watched stock in KRX After Market trading that day was KOSPI-listed Hanwha Galleria(452260). Hanwha Galleria, which had been unable to trade after-hours because it was not listed on the alternative trading venue NEXTRADE (NXT), became tradable after the regular session with the opening of the KRX After Market that day.
Hanwha Galleria drew a rush of buying right after the open as talk of a sale of "Galleria Timeworld," the flagship department store in Daejeon, surfaced. According to the retail industry, Galleria Timeworld's headquarters management planning office is said to have held a briefing for employees last week.
The stock, which had only inched up in the regular session, surged to 3,070 won, up 14.6% from the previous close, around 4:20 p.m. as strong buying flowed in after entering the After Market.
Amid the sharp price swings, the exchange triggered the static volatility interruption (VI) twice, at 4:13 p.m. and 5:13 p.m. The static VI is triggered when a stock price moves 10% or more from the previous close or the last single-price level, and when triggered, trading switches to single-price matching for about two minutes.
But after hitting the high, the stock fell back immediately. Hanwha Galleria was trading flat at 2,640 won, the opening price, as of 6:10 p.m. The intraday gap between the After Market high and low reached 16.7%.
Among small and mid-cap stocks overall, the pattern of giving back early spikes was repeated. In the KOSDAQ market, as of 4:09 p.m., PonyLink(064800) was up 29.90% (750 won) from the opening price (2,400 won). VALOFE also saw explosive buying at the same time, jumping 30.00% from the open and briefly hitting the upper limit. The one-day volatility of these stocks reached 32.35% and 32.01%, respectively.
Also, Yuhwa Securities(003460) (28.15%), HL SCIENCE(239610) (27.92%), LS THiRA-UTECH (25.16%), and Korea New Network (23.08%), among others, saw quotes swing sharply after the regular session closed and posted moves over 20%.
These stocks also slumped. PonyLink, which had risen to 3,150 won (29.90%) early in the KRX After Market, fell to 2,335 won (-3.71%) as of 6:10 p.m., and VALOFE also plunged from 2,990 won (30.00%) to 2,290 won (-0.43%), turning lower. Yuhwa Securities (3,050 won, -0.16%) and HL SCIENCE (5,290 won, -0.19%), among others, also slipped below flat.
The exchange explained that, compared with the regular session, the number of market participants is smaller and liquidity is thinner, temporarily increasing volatility. For the time being, concentration in certain stocks and heightened volatility may continue until liquidity stabilizes.
An exchange official said, "Because there isn't much resting volume on the order book, even relatively small trading volumes or small orders can send prices straight to the upper limit or plunge," adding, "Compared with NEXTRADE (NXT), an alternative trading venue, which trades 606 stocks in the After Market, KRX trades 2,459 stocks, and since it is the first day of trading, some stocks are showing sharp surges and drops due to greater volatility from a lack of liquidity."
During the premarket trading from 8 a.m. to 8:50 a.m. that day, some securities firms also experienced errors in their smart order routing (SOR) systems. On Mirae Asset Securities' home trading system (HTS) and mobile trading system (MTS), viewing of matched premarket buy and sell orders for some NTX investors was partially delayed.
Mirae Asset Securities rerouted SOR orders to Korea Exchange (KRX) from 8:50 a.m. Orders were processed normally thereafter, and the error was fixed ahead of the 9 a.m. regular session open. At Samsung Securities, during premarket trading, orders that had been canceled or amended were executed as-is, and some investors saw their available balance displayed as "0" despite having cash, among other glitches.