KOSPI 200 Futures Surge Triggers Buy-Side Car in South Korean Stock Market 📈

In the early trading hours of today, the South Korean stock market experienced a notable event. The KOSPI 200 futures index soared nearly 6%, leading to the activation of a buy-side circuit breaker, known as a ‘sidecar,’ in the KOSPI (Korea Composite Stock Price Index) market.

According to the Korea Exchange, the program trading buy orders were temporarily suspended at 9:06 AM KST (Korea Standard Time) due to this surge. At the time of activation, the KOSPI 200 futures index had jumped by 5.76% compared to the previous trading day, reaching 322.20.

This buy-side sidecar is triggered when the KOSPI 200 futures price increases by 5% or more compared to a reference price and this condition lasts for one minute. Once activated, the effect of program buying orders is suspended for five minutes.

For context, the KOSPI buy-side sidecar was last activated approximately eight months ago, on August 6 of the previous year, following a sharp decline and subsequent rebound in global stock markets. Conversely, just a few days prior, on March 7, a sell-side sidecar was triggered due to a steep market decline.

A ‘sidecar’ is a mechanism designed to curb excessive market volatility by temporarily halting program trading. Program trading involves large-scale trading based on pre-programmed instructions, and sidecars help prevent these trades from exacerbating market swings.

This event highlights the dynamic nature of the South Korean stock market and the measures in place to maintain stability during periods of high volatility. 🚀