KOSPI Falls Below 1500... KOSPI200 Volatility Index Hits Highest Level in 11 Years

[Image source=Yonhap News]

[Asia Economy Reporter Eunmo Koo] As the KOSPI fell below the 1500 mark, the so-called 'fear index' of the stock market surpassed 70, reaching its highest level in about 11 years and 4 months.

On the 19th, the KOSPI200 Volatility Index (VKOSPI) closed at 62.80, down 1.69 points (2.62%) from the previous trading day. Although it fell slightly that day, it surged to as high as 71.74 during the session, marking the highest level in 11 years and 4 months since November 24, 2008 (intraday high 74.08), right after the global financial crisis.

On the same day, the KOSPI closed at 1457.64, down 133.56 points (8.39%) from the previous trading day. As the index plunged more than 8%, a circuit breaker was triggered temporarily halting trading during the session. This was the second time in history that circuit breakers were triggered on the same day in both the Korea Composite Stock Price Index market and the KOSDAQ market, following the incident on the 13th.

VKOSPI is an index that measures the expected future market volatility reflected in option prices and tends to surge when the KOSPI plunges, hence it is also called the 'fear index.' The Korea Exchange has been calculating and announcing it since April 13, 2009.

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