Korea’s Nextrade, a new stock exchange, made its debut with a promising start as YG Entertainment led the first day of trading. The alternative trading platform, aiming to introduce competition into Korea’s capital markets, commenced operations with a selection of 10 blue-chip stocks, including Lotte Shopping Co. Nextrade, also known as NXT, is set to broaden its listing offerings to 800 stocks by the end of March, starting with 110 stocks by March 17 and gradually increasing to 350 by March 24.

The introduction of Nextrade represents a significant challenge to the long-standing monopoly of the Korea Exchange (KRX). By fostering competition and enhancing market liquidity, Nextrade aims to establish itself as a viable alternative to the established KRX, thereby injecting dynamism into Korea’s equity markets. The exchange’s opening ceremony was attended by government officials and corporate executives, symbolizing a new era in the country’s financial landscape.

One notable feature of Nextrade is its extended trading hours, allowing pre-market trading from 8 a.m. to 8:50 a.m. and after-hours trading from 3:30 p.m. to 8 p.m., offering investors more flexibility compared to KRX’s trading hours. Moreover, Nextrade offers improved bidding options and reduced trading fees for brokerage firms, in line with the duty of best execution, a rule implemented for stock brokers in Korea.

While Nextrade’s launch did not result in substantial changes to existing trading systems, it introduced a “smart order routing (SOR)” feature, enabling investors to optimize their trades between KRX and NXT automatically. On its inaugural day, Nextrade experienced moderate trading activity, with YG Entertainment Inc. emerging as the top performer in terms of transaction value, followed by Kolon Industries Inc. and LG Uplus Corp.

Despite the minimal price discrepancies between KRX and Nextrade, some investors found the dual-display of quotes and stock movements from both exchanges slightly complex. Notably, short selling is permitted on Nextrade, except during pre-market and after-market trading hours, presenting a nuanced contrast to KRX’s regulations.

In conclusion, the launch of Nextrade marks a significant milestone in Korea’s financial landscape, ushering in a new era of competition and innovation in the stock market. With a focus on expanding its listing pool and enhancing market dynamics, Nextrade is poised to redefine the trading landscape in Korea and offer investors a compelling alternative to the traditional exchanges.