KRX miffed at Eurex for not notifying it of Saturday shutdownA European exchange that trades Korean equity derivatives closed about three hours early on Saturday without properly informing Korea’s bourse operator or local securities firms, officials said.
The Eurex, which began to trade KOSPI200 options in 2010 in a deal with the Korea Exchange (KRX), closed at around 1:30 a.m. on Saturday, three and a half hours earlier than normal, according to the Korea Exchange.
The KRX said earlier this month that the Eurex would close at 5 a.m. on Saturday, the final trading session of this year.
The Eurex posted on its Web site on Dec. 22 that trading hours would be reduced on the final trading session on Saturday. However, the KRX said it did not receive any individual notice from the Eurex, even though the Frankfurt-based derivatives exchange is required to consult with the KRX if there are any changes.
Kim Won-dae, executive managing director of the KRX, said he will complain to the Eurex over the matter and ask it to ensure that similar things won’t happen again.
The abrupt closing of the Eurex stripped Korean investors of their chances to sell or buy positions, a KRX official said. He asked not to be identified, citing policy.
A local investor said he will take legal action unless there is an appropriate resolution. He declined to give his name.
KOSPI200 options are one of the world’s most heavily traded derivatives and whose underlying assets are a basket of 200 blue chip shares listed on the main Seoul bourse.
Derivatives are a financial product which draws value from other financial instruments such as stocks, bonds, currencies and commodities as well as events. Option contracts give holders the right to buy or sell stocks at a preset price within a certain period of time, allowing investors to make bets on future stock moves.