Nextrade recently made its debut in the financial market, aiming to provide trading options beyond Korea Exchange’s regular hours. Despite its potential to enhance market liquidity and flexibility, Nextrade encounters resistance from key domestic institutional investors, such as pension funds and mutual aid associations. These major players have refrained from participating in Nextrade, opting to stick with traditional exchanges due to the absence of clear guidelines for utilizing the new platform.

Upon its launch, Nextrade witnessed Dongkuk Pharmaceutical’s stock price surge during pre-market trading, albeit with a more modest increase during regular hours. However, reports indicate that institutions like the National Pension Service and Teachers’ Pension have refrained from engaging with Nextrade, citing concerns over system stability and the lack of established trading protocols. This cautious stance reflects the pivotal role institutional investors play in financial markets and underscores the importance of addressing their reservations.

While Nextrade plans to expand its tradable stocks and attract a broader range of securities firms, the reluctance of major institutional investors poses a significant challenge. The higher volatility associated with Nextrade compared to established exchanges, coupled with the demand for short-term trading, further complicates its adoption by these key players. Institutional investors emphasize the need for operational stability before committing significant funds to the alternative platform.

The hesitance displayed by institutional investors towards Nextrade underscores the critical role of regulatory compliance and platform reliability in fostering trust among market participants. The absence of a well-defined framework for trading on Nextrade has hindered its acceptance among major investors, mirroring the skepticism new exchanges often face in gaining industry confidence. As Nextrade navigates these challenges, establishing a robust operational infrastructure and regulatory framework will be paramount in winning over institutional investors and ensuring its long-term viability in the market.