Starting this September, the Korea Exchange (KRX) will introduce pre-market and after-market sessions, expanding total trading hours from the current 6 hours and 30 minutes to 12 hours. Behind this decision lies the successful first year of Nextrade (NXT). Since its launch, NXT has quickly established itself by capturing one-third of Korea's total trading volume, with 38.9% of all transactions occurring in pre-market and after-market sessions. Demand for extended hours has already been proven in numbers.
The global trend points in the same direction. With Korean retail investors' overseas stock holdings increasing nearly 30-fold over the past decade, major exchanges around the world are successively moving to extend trading hours. The shorter Korea's trading hours become relative to others, the greater the pressure for liquidity to flow out.
KRX's trading hours extension is not simply following what NXT has already done. The door NXT opened and the door KRX intends to open are different. NXT's extended hours were filled mainly by retail investors, particularly office workers who found it difficult to trade during regular hours. Institutions and foreign investors were not major participants in NXT's extended sessions. Major pension funds internally restricted order submissions to KRX only, citing reasons such as system reliability, and major foreign brokerages participating in KRX did not join NXT. Opening extended hours at KRX could change this landscape. It will create an environment where institutional investors such as pension funds and asset managers, along with foreign investors accessing the Korean market through KRX infrastructure, can participate in pre-market and after-market sessions for the first time.
Infrastructure for foreign investor accessibility is already being built. Work to improve access to Korea's capital market is accelerating, including the expansion of mandatory English disclosure requirements and the introduction of foreign investor omnibus accounts. Considering that one reason foreign brokerages did not join NXT was the burden of system connectivity, extended hours that utilize existing KRX infrastructure present a lower barrier. For European investors, the KRX after-market becomes a channel to trade Korean stocks before their home market opens, while for U.S. investors, the pre-market can serve as a new point of entry into the Korean market. The door of accessibility is already opening. The door of trading hours must open in step with that flow.
However, for new participants to actually flow in, a liquidity base must first be established. The market maker system should be expanded to extended hours, with participation incentives designed in parallel to induce genuine liquidity supply.
Surveillance systems must also be strengthened. Nighttime hours can carry greater risk of abnormal trading due to the relatively loose nature of human monitoring. Establishing a system that links abnormal trading detection artificial intelligence (AI) with automatic emergency trading halts is a necessary condition for securing trust.
Led by the U.S. Nasdaq's push for 23-hour trading, major exchanges in Europe and Asia are also successively discussing extensions. At a time when the boundaries between national stock markets are being dismantled, falling behind means not merely losing trading hours but losing investors and liquidity together. If NXT opened the door to the domestic market for office workers after work, KRX's trading hours extension opens that door to institutions and foreign investors. The competitiveness of Korea's capital market ultimately depends on how many investors choose the Korean market. And extending trading hours is the most direct means of broadening that choice.
