2023-06-08 06:58:10
Derivatives trading time is getting faster… ‘KOSPI 200 Futures & Options’ opens at 8:45
From July 31st, the derivatives market will open 15 minutes earlier than the stock market. The early opening targets are representative index products such as KOSPI 200 futures and options.
According to the Financial Services Commission on the 8th, the Korea Exchange is promoting the revision of the ‘partial revision of the derivatives market business regulations’ from this day to the 13th. After obtaining approval from the Financial Services Commission, it plans to open the derivatives market early on July 31.
The target for early opening is KOSPI 200 futures and options, and the target will be expanded by identifying future market demand.
In the future, the regular trading time of the derivatives market will be increased by 15 minutes, and the market price single price time will be reduced from the current 30 minutes to 15 minutes. However, in order to prevent excessive volatility in the derivatives market due to early market opening, the upper and lower 8% of derivatives price limits are applied until before the stock market opens (08:45~9:00).
The early opening of the derivatives market is a measure to mitigate stock price volatility in the early stages of the market opening. Currently, domestic derivatives markets such as KOSPI 200 futures open at the same time as the stock market where underlying assets are traded since their opening in 1996.
The prices of derivatives contracted in the derivatives market reflect various predictions of market participants regarding the future prices of the underlying assets in advance, so that the price of the underlying assets can be discovered (Price Discovery).
In Korea, unlike overseas markets, the futures market and the spot market open together, which raised difficulties for investors to refer (price discovery) to the price of derivatives at the beginning of the stock market.
In addition, the spot market and futures market opened at the same time, so the volatility in the first 15 minutes of the stock market opening was higher than the daily stock market price volatility.
“The early opening of the derivatives market will ease stock price volatility in the early stages of the stock market opening and improve the international consistency of the domestic derivatives market,” said Kim So-young, Vice Chairman of the Financial Services Commission.
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