Korea Exchange Triggered Around 11:04 AM
Following fears of a recession in the United States, the U.S. stock market plummeted, and the domestic stock market also crashed after 'Black Friday.' On Monday the 5th, the domestic stock market plunged from the opening, falling more than 100 points at one point. Various indices are displayed on the electronic board as employees work in the dealing room of Hana Bank in Euljiro, Seoul. Photo by Heo Younghan younghan@
Amid concerns of a recession originating from the US, the domestic stock market faced a 'Black Monday,' triggering a sidecar (temporary suspension of program sell orders) during the morning session.
On the 5th, the Korea Exchange announced that as of 11:04 AM, a sidecar was activated for 5 minutes due to a decline in KOSPI 200 futures.
This is the first time in about 4 years and 2 months that a sell-side sidecar has been triggered in the securities market since June 2020, when the market was shaken by the COVID-19 pandemic.
A sidecar is a system designed to mitigate the impact of program trading on the market by temporarily restricting program trading orders for 5 minutes when market conditions change rapidly.
The sell-side sidecar in the securities market is activated when futures prices fall more than 5% and sustain that level for over 1 minute. However, since the sidecar can only be triggered once per day, it will not be reactivated even if futures prices fall further.
As of 11:26 AM on the same day, the KOSPI index was at 2,547.63, down 128.56 points (4.80%) from the previous close. The index started down 2.42% and widened its losses during the session due to foreign selling pressure. Foreign selling volume exceeded 1 trillion won.
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