Next Trade to Temporarily Ban "Pre-Market Upper and Lower Limit Orders" Starting August 12

Static VI to Be Introduced on September 14
Close Monitoring for Abnormal Signs

Next Trade (NXT) will temporarily prohibit orders for upper and lower price limits in the pre-market starting from August 12.

NextTrade. Yonhap News

On August 7, Next Trade announced through a press release, "Until the introduction of the static Volatility Interruption (VI) mechanism, we will temporarily prohibit upper and lower limit orders in the pre-market in order to minimize cases of trade execution at price limits caused by input errors."

Previously, on August 6, SK hynix recorded its opening price at the lower price limit on the Next Trade pre-market with just 11 shares traded. On August 5, Samsung Electro-Mechanics and Alteogen formed their opening prices at the upper price limit compared to the previous day's closing price, each with just 1 share traded.

Next Trade explained, "As a multilateral trading facility (alternative trading system), not a regular exchange under the Capital Markets Act, we operate our market using the same order-driven method as global alternative trading systems," adding, "Some executions at the upper and lower price limits are presumed to have been caused by input errors during the order processing." This method entails executing trades continuously in the order that quotes are received among those eligible for matching.

Next Trade further stated, "We are restricting market orders—only allowing limit orders—in the relatively less liquid pre-market and after-market sessions, since market orders can lead to greater price swings." The company also added, "From September 14, in addition to the currently implemented dynamic VI, we will introduce a static VI. When the VI is triggered, the process will switch from a trading halt to a two-minute single-price auction in order to stabilize prices."

Next Trade stated, "Going forward, we will closely monitor for abnormal signs of sharp price fluctuations caused by upper and lower limit orders, and will cooperate closely with the financial authorities as well."

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