Back

South Korea Halts KOSPI Trading After Futures Drop Triggers Circuit Breaker

Japan’s Nikkei and South Korea’s KOSPI both saw sharp drops, with Seoul’s market hit by circuit breakers after steep intraday losses.

Summary

On November 5, South Korea suspended KOSDAQ futures program trading after steep declines, with the KOSPI index plunging 6% intraday. Trading paused for five minutes earlier in the day as KOSPI 200 futures dropped 5%, triggering circuit breakers. Japan’s Nikkei 225 also fell 2.50% to 50,212.27, while Korea’s KOSPI closed down 2.85% at 4,004.42. These interventions aim to manage extreme volatility and give market participants time to react.

Terms & Concepts
  • KOSPI 200 futures: Derivatives contracts tracking the KOSPI 200 index, used for speculation or hedging in South Korea's stock market.
  • Circuit breaker: A mechanism that temporarily halts trading when prices move beyond preset thresholds to prevent market panic.
  • Program trades: Automated trading executed by computer programs based on predefined criteria, often used in high-volume markets.