Expansion of Over 1 Trillion Won 'Foreigners' Irregular Trading' in the Futures Market

[Asia Economy Reporter Junho Hwang] Since last month, foreign investors have frequently engaged in large-scale irregular trading exceeding 1 trillion won in the KOSPI 200 futures market. This phenomenon is analyzed as a result of the volatile fluctuations in Asian stock markets and the inflow and outflow of funds responding to these changes. Market experts point out that supply-demand volatility caused by large-scale irregular trading in the futures market by foreigners may continue, making it a time to focus on risk management.

According to Samsung Securities on the 14th, since July, there have been nine instances where foreigners recorded net trades exceeding 1 trillion won in the KS200 futures market. Large-scale irregular trading, which occurred only three times in the first half of the year, has become frequent since July.

The increase in such trading is presumed to be due to the inflow of active funds such as macro trading-oriented hedge funds responding to the sharp fluctuations in Asian stock markets.

The futures market is experiencing increased volatility due to the expansion of such irregular trading, and this supply-demand-driven volatility is expected to continue for the time being. When dividing foreign trading into program trading and non-program trading, program trading has consistently shown a selling bias since the beginning of the year. In contrast, non-program trading has seen relatively frequent reversals. Trading closely related to Samsung Electronics' price fluctuations is also analyzed to be largely influenced by active momentum trading generated in non-program trading.

Jeon Gyun, a researcher at Samsung Securities' Global Investment Strategy Team, explained, "In the second half of this year, with tapering issues and debates over the economic peak coinciding, foreigners' irregular large-scale trading in the futures market is expected to act as a factor stimulating supply-demand volatility for the time being."

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