KRX’s First Night Session Draws 93% Retail Trading as VI Curbs Triggered More Than 1,600 Times

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

Data from the Korea Exchange’s data marketplace on September 14 showed VI curbs were 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 regular trading hours the same day.

A total of 2,501 stocks participated in the night session, and some names triggered the curbs more than twice. Total trading value was 1.8 trillion won ($1.35 billion).

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

Limited participation by institutions and foreign investors appears to have amplified price swings by sapping liquidity. Park Sang-hyun, founder of Clepsydra Capital, told Bloomberg 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, but significant risks may remain until large investors join and provide liquidity.

Price swings were particularly pronounced in small- and mid-cap stocks. Some small-cap shares rose 15% to 30% on relatively minor news before quickly surrendering those gains, Park added.