The Korea Exchange (KRX) launched an after-hours market on the 14th, ushering in an era of 10-hour-and-30-minute trading days for South Korean stocks. The move follows a global push by exchanges to extend trading hours, aimed at widening investment opportunities and strengthening market competitiveness.
Market participants, however, have voiced concerns from the outset. The head of one asset management firm said in a recent interview that unless the groundwork is laid properly, "we could end up with an amusement park that opens its gates but where no one rides the rides, and eventually they rust." Building a market where investors can actually trade during those hours matters more than simply extending them, the executive stressed.
Confusion is already surfacing. Because a "one-board" system linking the regular session and the after-hours market is not yet in place, orders placed during regular trading expire when the session closes at 3:30 p.m. Investors who assumed unfilled orders would carry over into the after-hours market must place them again after 4 p.m. In other words, the infrastructure to support the longer trading day remains unfinished. The exchange aims to build the one-board system and introduce a pre-market session by the end of next year.
Foreign investors have also expressed disappointment that exchange-traded funds (ETFs) were excluded from after-hours trading, saying it limits their options. Asset managers, by contrast, argue that the range of tradable products should not be expanded in haste without real-time hedging by liquidity providers (LPs) and an adequate supply of liquidity. That is why it is difficult to gauge when ETFs might begin trading after hours.
Liquidity is another challenge. With trading hours extended, prices could swing sharply on even small orders if participation is thin. The risk of shrinking fund flows into the domestic market warrants particular attention after the U.S. raised its policy rate on the 16th and with the possibility of a policy shift by the Bank of Japan now under discussion.
The benefits of longer trading hours are clear: they narrow the time gap with overseas markets and give investors more chances to trade. But success cannot be measured by how many more hours the market stays open than those of other countries. An order system that does not confuse investors, ample liquidity, stable price discovery and a broader choice of products must come with it. Keeping the amusement park open longer matters — but so does having rides people feel safe getting on.
