Stock Futures Market Booms... 130% Increase Last Year

Last Year’s Stock Futures Market
Average Daily Trading Volume Increased by 130.7%
Attributed to Rising ETF Investments
Also Influenced by Short-Selling Ban and Concentrated Forces

On the 15th, KOSPI opened at 3,108.70, up 8.12 points (0.26%) from the previous trading day, as employees were working in the dealing room of Hana Bank in Jung-gu, Seoul. KOSDAQ opened at 965.83, up 1.52 points (0.16%) from the previous trading day. The won-dollar exchange rate started at 1,105.0 won, down 2.0 won from the previous trading day. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Hwang Junho] Last year, buoyed by the stock market's upward trend, stock futures trading also surged significantly. This is analyzed as a result of a sharp increase in speculative funds aiming for big profits, along with a rise in ETF investments for risk diversification in direct investments.

Stock Futures, Average Daily Trading Value Increased by 130%

According to the Korea Exchange on the 15th, the average daily trading value in the stock futures market last year was 3.205 trillion KRW, a 130.7% increase compared to the previous year. Trading volume also rose by 81.2% to 4,542,216 contracts.

69.9% of the trading value was directed toward the top 10 companies by market capitalization. 30% of the total (961 billion KRW) was concentrated in Samsung Electronics, which increased by 158% compared to the previous year. Next was SK Hynix (256.3 billion KRW), which grew by 39%. Including LG Chem, ranked third with a trading value of 185.2 billion KRW, the combined average daily trading value of these three companies was 1.4025 trillion KRW.

This growth in the stock futures market appears to be a result of increased ETF investments following last year's stock market boom. Seonghoon Kwak, a researcher at Shinhan Financial Investment, interpreted, "With a significant increase in ETF trading last year, futures trading by asset managers to hedge risks also increased."

Stock Futures Instead of Short Selling?

As the stock market experienced sharp fluctuations last year, investors' demand for risk diversification grew, which seems to have led to an increase in stock futures trading. Researcher Kwak said, "Along with the market volatility in March last year, individual interest in the derivatives market also increased. It is possible that investors seeking to leverage their investments flocked to stock futures."

The average daily trading value of all derivatives, including stock futures, was recorded at 61.9 trillion KRW, a 33.1% increase from the same period the previous year. Trading volume also rose by 40.1% to 8.8 million contracts from 6.28 million contracts the previous year. The average daily trading values of index futures such as KOSPI 200 futures, Mini KOSPI 200 futures, and KOSDAQ 150 futures increased by 52.9%, 91.2%, and 78.6% respectively compared to the previous year. Trading volumes expanded by 45.6%, 77.2%, and 63.1% respectively.

In the asset management industry, it is speculated that stock futures were utilized due to the ban on short selling. Last year, foreigners accounted for the largest share of trading value by investor type, recording 49.7% (institutions 33.9%, individuals 15.9%), showing an upward trend for four consecutive years.

This content was produced with the assistance of AI translation services.