Korea Exchange to Suspend Nighttime Derivatives Trading on Eve of Chuseok Holiday

The Korea Exchange announced on September 10 that it will suspend nighttime derivatives trading on October 2, the day before this year's Chuseok holiday begins.

In a press release issued the same day, the Korea Exchange stated, "We plan to suspend nighttime derivatives trading that would normally begin at 6:00 p.m. on October 2 and end at 6:00 a.m. the following day."

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The exchange explained that conducting nighttime derivatives trading immediately before a long holiday could expose market participants' overnight positions to risk for an extended period.

Nighttime derivatives trades are cleared together with the following regular trading session. If nighttime trading were to take place on October 2, clearing would not occur until October 10, after the holiday, potentially exposing participants to excessive risk.

The Korea Exchange said it decided to suspend trading, considering the possibility of a sharp increase in client risk due to factors such as margin calls, offsetting trades, and a lack of liquidity. The exchange also explained that other major Asian exchanges that offer nighttime trading, such as those in Hong Kong and Taiwan, implement special market measures such as suspending nighttime trading on the day before long holidays, just like the Korea Exchange.

The Korea Exchange began offering its own nighttime derivatives trading in June of this year.

The Korea Exchange also plans to close the securities, derivatives, and general commodities markets from October 3 to October 9 for this year's Chuseok holiday.

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