The number of volatility interruption (VI) triggers in the Korea Exchange's after-market session fell to about half its opening-day level after topping 1,100 on the first day. The exchange plans to run a nine-member special surveillance task force through the end of the year to guard against possible unfair trading in the early stage of nighttime trading.
The Korea Exchange (KRX) said on the 21st that it had analyzed market trends during the first week of the after-market session and would strengthen its systems for preventing and monitoring unfair trading.
After-market VI triggers fell to 553 on the 18th from 1,112 on the 14th, the opening day. Still, even though after-market trading volume is only 6.1% of the regular session, the figure slightly exceeds this year's daily average of 494 VI triggers in the regular market.
The exchange said a high number of VI triggers alone makes it difficult to conclude that market volatility is elevated. The VI briefly switches trading to single-price auctions during sharp price swings, preventing trades at abnormal prices and allowing the market to find an appropriate level.
High-low volatility, measured as the gap between the highest and lowest prices, was lower in the after-market than in the regular session for five consecutive trading days after the launch. Average high-low volatility for the KOSPI from the 14th to the 18th was 3.8% in the regular session and 2.1% in the after-market. For the KOSDAQ, the figures were 5.4% and 3.5%, respectively.
Separately from market stability, the exchange is tightening surveillance of nighttime unfair trading. The Market Oversight Commission will operate an "after-market special surveillance task force" through the end of the year and plans to consider extending the period depending on market conditions.
The task force consists of nine people, three each in surveillance, prevention and short selling. It will jointly analyze trading records from the regular session and the after-market, and will extend the hours for unfair trading prevention measures into the night.
"We will build nighttime surveillance infrastructure by extending the hours of unfair trading prevention measures and jointly analyzing trading records from the regular session and the after-market," a KRX official said.
Meanwhile, daily average trading volume in the after-market's first week came to 54.85 million shares, with turnover of 1.1 trillion won. Retail investors accounted for 90.4% of turnover, far outweighing foreign investors at 6.7% and institutions at 2.6%.
Of the 2,763 eligible stocks, 2,379, or 86.1%, recorded actual trades. After-market turnover was equivalent to 4.6% of the regular session over the same period.
