[NextTrade One Year On] ① Daily Trading Value Reaches 23 Trillion Won, First Profit... Performance by the Numbers

Average Daily Trading Value Soars 5.1 Times
Pre- and After-Market Demand Absorbed
Fee-Cut Race Triggers a "Catfish Effect"

On March 4 last year, South Korea's first alternative trading system (ATS), Nextrade (NXT), was launched, and within just one year it has firmly established itself in the market. As trading during commuting hours has become more active, its average daily trading value has surged 5.1 times, which has directly translated into net profit in the 20 billion won range, proving a stable profit model. Beyond simply adding another exchange, it is being evaluated as having generated a "catfish effect" in a market that had been rigid for 70 years, creating a new, investor-centric trading ecosystem.

Ten stocks being traded are displayed on a monitor at the Nekseuteureideu office in Yeongdeungpo-gu, Seoul. Yonhap News

◆Beyond market settlement to turning a profit

According to Nextrade on the 27th, its average daily trading value from April 28 to May 2 last year, in the early phase after launch, stood at 4.5206 trillion won. That week marked the fifth week, or one month, after the number of securities tradable on Nextrade had been finally expanded to 796. However, in the most recent period, from February 19 to 24 this year, the average daily trading value was tallied at 23.3399 trillion won, an approximately 5.1-fold surge. This follows 7.0435 trillion won in December last year and 20.9019 trillion won in January this year, showing a steep upward trend.

Nextrade's presence in the domestic stock market is steadily growing. In particular, the strong performance of the pre-market and after-market, which operate before and after the regular session, has stood out. The combined average daily trading value of these markets reached 8.337 trillion won over the same period. In the case of the pre-market, the average daily trading value was 1.463 trillion won in December last year, 4.5366 trillion won in January this year, and 4.8816 trillion won during February 19-24. For the after-market, the figures were 1.0756 trillion won in December last year, 3.6202 trillion won in January this year, and 3.4554 trillion won during February 19-24. The increase in Nextrade’s trading value is moving in line with the overall activation of trading in the market. The Korea Exchange’s average daily trading value rose from 25.8779 trillion won in December last year to 41.9701 trillion won in January this year and 43.6611 trillion won in February, an increase of about 68.7% in just two months. As the overall market size expands, Nextrade’s trading convenience is coming to the fore, accelerating the inflow of investors.

The improvement in profitability is also remarkable. Nextrade has succeeded not only in establishing itself in the market but also in achieving profitability. On the 9th, Nextrade disclosed its provisional operating results for the 2025 fiscal year through a filing on key management matters. Operating revenue was tallied at 64.4 billion won, and operating profit came in at 14.6 billion won, marking a turnaround into the black. Profit before income tax expenses and net profit for the period also returned to profitability from the previous years’ losses, reaching 17.9 billion won and 20.5 billion won, respectively. Total assets increased from 123.8 billion won in the previous fiscal year to 150.8 billion won, while total equity rose from 116.3 billion won to 136.7 billion won. Over the same period, liabilities increased from 7.6 billion won to 14.1 billion won. Nextrade stated, "Since the start of operations in March last year, operating revenue has been generated, and marketing and operating expenses have increased."

◆12-hour trading system

The growth in off-hours trading has been driven by the spread of "FOMO" (fear of missing out) amid the recent stock market rally, as well as the influx of office-worker investors. In addition, given the characteristics of the domestic market, which is heavily influenced by the New York Stock Exchange, demand to respond preemptively to global issues through the pre-market has also converged, and this has been a major factor behind the activation of trading.

In fact, the most tangible change investors have felt since Nextrade’s launch has been the extension of trading hours. Domestic stock trading hours were significantly expanded from the previous 6 hours and 30 minutes to 12 hours (8:00 a.m. to 8:00 p.m.). Nextrade’s pre-market (8:00 a.m. to 8:50 a.m.) and after-market (3:30 p.m. to 8:00 p.m.) were added around the regular session. New types of order quotes were also introduced. Previously, the domestic stock market offered market orders and four types of limit orders (regular, best, most favorable, and conditional). To these were added "mid-price orders," in which the price is automatically adjusted to the midpoint between the best bid and best offer, and "stop limit orders," in which a limit order is placed once a specific price is reached. The addition of new order types has led to diversification and greater flexibility in trading strategies. In addition, trading fees were set 20-40% lower than those of the Korea Exchange, which has served as an incentive for investors. The Korea Exchange, in response, has also lowered its fee rates, marking the start of full-fledged price competition between exchanges.

◆Expansion into the ETF market

Nextrade is pushing to open a domestic exchange-traded fund (ETF) market in the fourth quarter of this year. The Nextrade ETF market will operate from 8:00 a.m. to 8:00 p.m., the same hours as the current stock market. Notably, by newly introducing a liquidity provider (LP) system for trading outside the regular session, Nextrade aims to support ample liquidity and thereby promote the activation of the ETF market following individual stocks. It will run an incentive program to ensure smooth liquidity provision by LPs. LPs will be exempted from trading fees and will receive separate compensation for providing liquidity.

For the pre-market, Nextrade will impose quote obligations on LPs from the market opening time to manage volatility, while in the main market and after-market, quote obligations will apply from five minutes after the opening until the close. The scope of ETFs eligible for trading will be expanded step by step, taking market stability into account. Trading will start with 10 ETFs and expand to all ETF products in the third week. However, the ETFs eligible for trading will be selected semiannually (in May and November), limited to the top 100 by average daily trading value.

◆Maximizing market efficiency

Experts unanimously say that Nextrade has broken the Korea Exchange’s decades-long monopoly and, through competition, has elevated the efficiency and infrastructure innovation of the domestic capital market to a new level. Lee Hyoseop, senior research fellow at the Korea Capital Market Institute, said, "When the KOSPI broke through 6,000 this time, Nextrade was positively evaluated for providing sufficient liquidity to the market," adding, "It has triggered innovation in trading infrastructure through competition." He went on to say, "Nextrade’s product range will continue to expand, starting with ETFs and moving into derivatives and bonds," and "Greater profitability can be generated, and it can also branch out into a global alternative trading system."

Lee Junseo, professor of business administration at Dongguk University, said, "Nextrade had prepared its systems well even before its launch and adopted differentiation strategies such as the pre- and after-market and various order types," explaining that "as the stock market has risen significantly recently, it has settled much faster than expected." He added, "The Korea Exchange’s 70-year single-handed dominance has been significantly broken," and "With the introduction of a competitive, multi-exchange structure, the efficiency of the exchange market has increased substantially."

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