KRX Night-Trading Debut Sees Retail Take 93% Share as Volatility Curbs Trigger More Than 1,600 Times

Retail investors accounted for more than 90% of turnover in the Korea Exchange’s first night-trading session, while thin liquidity caused volatility interruption curbs to be triggered more than four times as often as during regular trading hours.

According to Korea Exchange data released on September 14, volatility interruption, or VI, was triggered 1,637 times during the inaugural night session, which ran from 4 p.m. to 8 p.m. on September 13. That was more than four times the number recorded during the regular session the same day.

A total of 2,501 stocks participated in night trading, and some shares triggered VI more than twice. Total trading value was 1.8 trillion won ($1.33 billion).

Retail investors dominated the session, accounting for 93% of total trading value. Foreign investors made up 3.9%, with the rest coming from domestic institutional investors.

Limited participation by institutions and foreign investors appears to have sapped liquidity and amplified price swings. Bloomberg quoted Park Sang-hyun, founder of Clepsydra Capital, as saying there were not enough buy and sell orders in the market because most institutional investors stayed on the sidelines. Demand from retail investors for night trading is clear, he added, but substantial risks could remain until large investors begin participating and supplying liquidity.

Price swings were especially pronounced in small- and mid-cap stocks. Park said some smaller stocks surged 15% to 30% on relatively minor news before quickly surrendering those gains.