Nextrade market share falls after Korea Exchange opens after-hours market

Decline in Market Share and Trading Volume

Data from the financial investment industry shows that during the first 11 days of the month, prior to the Korea Exchange (KRX) opening its after-hours market, Nextrade captured an average daily market share of 10.64% by volume. In the subsequent eight trading days from October 14 to October 23, that average fell to 9.10%, representing a drop of 1.54 percentage points. Actual trading activity contracted alongside the percentage share. Nextrade’s average daily volume dropped 13.7% from 1억 966만 주 to 9467만 주. Average daily trading value fell 18.4% from 13조 940억 원 to 10조 6782억 원.

By contrast, the Korea Exchange maintained stable operations during the same intervals. The main exchange’s average daily volume remained virtually flat, shifting from 9억 5769만 주 to 9억 5819만 주. Its average daily trading value slipped just 2.1% from 28조 7527억 원 to 28조 1509억 원. The contraction at Nextrade concentrated heavily in the newly contested evening window. Nextrade’s after-hours trading volume plummeted 45.7% from 2089만 주 to 1135만 주, while trading value dropped 38.3% from 2조 7572억 원 to 1조 7013억 원. Conversely, Nextrade’s pre-market trading volume, which operates outside exchange hours, grew by 11.2% over the same timeframe.

Impact of Restricted Listed Stock Selections

The drop in evening transactions stems largely from the disparity in listed stocks between the two venues. Nextrade supports 606 total stocks, comprising 335 Kospi issues and 271 Kosdaq issues. The Korea Exchange lists roughly 2,600 securities, including 914 Kospi issues and 1,730 Kosdaq issues. Because Kosdaq stocks account for roughly 80% of total volume in the exchange’s after-hours market, Nextrade faced a disadvantage due to its smaller roster of listed Kosdaq companies.

Expanding the roster of available equities represents the most direct path to boosting volume, but regulatory frameworks limit that expansion. Under South Korean financial rules, an alternative trading system cannot exceed 15% of the main exchange’s total trading volume. This so-called 15% rule restricts Nextrade from aggressively scaling up its stock count. Nextrade’s volume relative to the main exchange slipped from an average of 11.9% prior to the exchange after-hours launch down to 10.0% afterward.

Regulatory Constraints and Fourth-Quarter Outlook

Adjusting the existing lineup of traded assets offers an alternative to adding new listings. Nextrade builds its core offerings around the Kospi 200 and Kosdaq 150 indices, leaving securities outside those benchmarks as the primary candidates for adjustment. With domestic capital concentrating heavily in large-cap stocks, management faces challenges in selecting which equities to add or remove.

While Nextrade previously adjusted its roster dynamically based on market conditions, the platform decided against modifying its trade execution roster for the fourth quarter. A Nextrade representative stated that while the launch of the exchange’s after-hours market provided slightly more regulatory room than before, the buffer remains narrow, and the platform requires more time to assess long-term trends.