Sell-side sidecars were triggered in succession on the KOSPI and KOSDAQ markets as volatility widened in Korea's stock markets.
The Korea Exchange (KRX) said it activated a sell-side sidecar in the KOSPI market at 1:31:58 p.m. Wednesday, temporarily suspending the effect of program sell orders. A sell-side sidecar was then triggered in the KOSDAQ market at 1:33:58 p.m.
A sidecar is a market stabilization mechanism designed to prevent sharp swings in the futures market from rapidly spreading to the spot market. It is triggered when the price of KOSPI 200 or KOSDAQ 150 futures moves beyond a certain level compared with the reference price or the previous day's close and the condition persists for more than one minute. When triggered, the effect of program buy or sell orders is suspended for five minutes.
