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Nextrade Implements New Volatility Safeguards Following SK Hynix Flash Crashes
Electronic Technology · Semiconductors · yonhap_finance · 2026-08-31
Nextrade will introduce static volatility interruption and single-price auction mechanisms to prevent abnormal price swings in its pre-market trading.
What Happened
Regulatory Response: Nextrade is implementing new market stability measures following repeated incidents where SK Hynix shares hit the lower limit in pre-market trading due to anomalous orders. The exchange aims to address vulnerabilities in its current continuous trading system that have led to extreme price volatility.
Static VI Implementation: Starting next month, the exchange will introduce a 'static volatility interruption' (VI) mechanism. If a stock's price deviates by more than 10% from the reference price, the system will switch to a two-minute single-price auction to stabilize the valuation.
Enhanced Trading Protocols: The new rules also mandate that when a dynamic VI is triggered during trading hours, the system will conduct a two-minute single-price auction rather than merely pausing trades. Similar auction procedures will be applied when resuming trading after market-wide halts or individual stock suspensions.
Market Impact: Previous incidents involving SK Hynix saw small-volume orders triggering lower-limit prices, causing significant collateral damage in derivative markets. These structural changes are designed to prevent such 'fat finger' errors or manipulative orders from distorting the opening price discovery process.