ELW trade imploding as a result of court case

Transactions in equity-linked warrants (ELWs) have declined to a third of what they were in their heyday in the wake of a high-profile court case that has embroiled the current and former CEOs of 12 securities brokerages.

The CEOs are accused of having provided “scalpers,” or in-and-out traders dealing in ELWs, with direct use of the brokerages’ dedicated lines, allowing more split-second advantages in buying and selling than a run-of-the-mill home investor had.

Regular investors have lost much money in ELW trading, and prosecutors claim that such a service constitutes “unfair means.” The securities firms claim such services are standard global practice.

Although Korea had the largest ELW market in the world, analysts said that with all brokerages suspending direct market access services for ELW trading, turning the scalpers, who were high-frequency investors, off of ELW trades, the market has quickly deflated.

ELW are a type of derivates in which the holder has the right but not the obligation to buy or sell underlying assets at a set price on or before an expiration date.

According to the Korea Exchange yesterday, ELW transactions on Monday remained at 872.3 billion won ($823 million), the lowest trading volume in one year and seven months since December 23, 2009, the previous low.

Monday was the first court hearing of 12 securities brokerages’ CEOs, their chief IT officers and a team of scalpers themselves for their part in providing or using a “direct market access” or DMA system that processed ELW transactions about 50 times faster than home trading systems used by regular investors.

Korea had the largest ELW market in the world, having surpassed Hong Kong with the biggest record in daily trading volume of 2.77 trillion won on Oct. 14 of last year.

However, the volume of ELW trading on Monday was a mere 31 percent of the record in October, and about half Hong Kong’s average daily volume of roughly 2.1 trillion won.

The local securities sector suspended all direct market access services for ELWs after prosecutors started investigating the business, and marketing efforts have mostly dried up since the beginning of the court case.

The Financial Services Commission said in May it will require ELW investors to put down a deposit of 15 million won, as for other derivatives.

By Lee Jung-yoon [joyce@joongang.co.kr]

한글 관련 기사 [중앙일보]

검찰 칼날 겨눠진 ELW 거래량 뚝

증권사 대표 기소에 스캘퍼 잠적
지난해 10월 대비 70% 가량 줄어

주식워런트증권(ELW) 시장이 크게 위축되고 있다. 검찰이 ELW 부정거래를 수사한 이후 12개 증권사 대표가 기소되고 스캘퍼(초단타매매자)가 대거 잠적한 데 따른 것이다.

13일 한국거래소에 따르면 11일 하루 ELW 거래대금은 8723억원이었다. 이는 2009년 12월 23일 6634억원 이후 1년7개월 만에 가장 낮은 것이다. 특히 2010년 10월 14일 2조7747억원으로 정점을 찍었을 때와 비교하면 11일 거래대금은 31%에 불과하다.

홍콩 ELW 시장 규모(2조1000억원대)를 넘어 세계 1위로 성장했던 국내 ELW 시장이 검찰 수사 여파로 1년 새 홍콩 시장의 절반에도 못 미치게 됐다. 이달 하루 평균 거래대금은 1조435억원으로, 2010년 10월 하루 평균 2조678억원의 절반 수준이다. 매매의 활발한 정도를 보여주는 회전율은 2010년 10월 20%를 넘나들다 지난 11일에는 8.27%로 뚝 떨어졌다. 이러다간 시장이 고사하는 게 아니냐는 우려가 시장 일각에서 나온다.

증권업계 관계자는 “최근 지수가 반등하면서 ELW 투자로 수익을 내기 좋은 조건이 돼 그나마 1조원 안팎의 거래대금이 유지되고 있다”며 “스캘퍼는 몸을 사리고, 8월부터 ELW 추가 건전화 방안에 따른 예탁금(1500만원) 부과가 시작되면 소액 투자자가 줄어 ELW 시장이 자칫 고사할 수도 있다”고 말했다.