market knowledge and trading rules - KOSPI

1. Korea exchanges

- there're several markets

- for equities, there're KOSPI and KOSDAQ markets

2. trading hour (Mon-Fri excluding public holiday; local time)

- quotation receiving hours: 0800-1500

- trading hours: 0900-1500

- it also has off-hours session

i) pre-hours: 0730-08-30 quotation receiving hours; 0730-0830 trading hours

ii) post-hours: 1500-1800 quotation receiving hours; 1510-1800 trading hours

- Dec/31 is a holiday; if it falls in a holiday or Saturday, one previous business day closest to the Dec/31

3. quotations

- quotations are trading orders placed to Exchange Trading System by member firms whether it be customer orders or proprietary trading orders

- quotation types

i) limit quotation

ii) market quotation

iii) limit-to-market-on-close quotation

iv) immediately executable limit quotation

v) best limit quotation

- KRX member firms may entail following conditions to limit quotation, market quotation, and immediately executable limit quotation

i) IOC (immediate or cancel) - part of whole qty

ii) FOK (fill or kill) - entire qty

- the price at market closing is determined by individual auction at a single price method (call auction)

- cancellation & correction of quotations

i) cancel part or entire quantity; if partial cancel, the submitted time of the initial quotation shall be valid for execution priority

ii) correction refers to change of price; KRX member firm may correct price to the partial or entire quotation; execution priority for the corrected part will be the correction submit time

4. trading unit is 10 (or 1 if base price of issue on that day is above KRW 50,000); trading unit for off-hour session is 1;

5. ticks

- minimum price intervals at which quotations can be made. it's determined by trading efficiency (system capacity) and lower transaction cost (tight spreads)

Share price (KRW)	Tick size
lower than 1,000	1
1,000 - 5,000	5
5,000 - 9,990	10

10,000 - 49,950

50

50,000 - 99,900

100

100,000 - 499,500

500

higher than 500,000

1000

6. daily price limit

- for KOSPI market, it's 15% (disregard the residual amounts so that all the price limits are set as available tick size)

7. prices

- base price: previous close price

- open price: is determined by the quotations received during 0800-0900 period (single price call auction method)

7. settlement

- T+2

9. for more details

eng.krx.co.kr