Definition

Sidecar is a system designed to ease the impact that the program trading may bring on the KOSDAQ market by making program trading orders ineligible for trade execution temporarily when the market experiences a sharp decline.

Program trading: It includes all index arbitrage trading and non-arbitrage trading where a same person trades 10 or more constituents of KOSDAQ 150 index simultaneously.

Halt of validity of orders for program trading
  • When the price of KOSDAQ150 index futures increases (or decreases) by 6% or more compared to the base price pursuant to Paragraph 2 in Article 70 of Derivatives Market Business Regulation, and the KOSDAQ150 index also increases (or decreases) by 3% or more compared to the closing value of the previous trading day, the validity of bid or offer orders of the program trading are halted for 5 minutes from the time that the above two conditions occur and continue for 1 minute at the same time.
  • In case of the program trading orders of which validity is halted, the validity of orders for cancelation and the correction of the orders concerned is also halted during the time period of the halt.
  • When 5 minutes elapses after halting the validity of program trading orders, those orders for program trading in the halt can participate in the price decision in the order of acceptance.
Release from halt of validity of orders for program trading

The program trading orders under sidecar are released from the halt if they correspond to one of following:

  • 5 minutes past from the application of sidecar;
  • From 40 minutes before the market closing; and
  • From the time when the trade resumes if, during the time period under the application of sidecar, the trades halt in the KOSDAQ market as the CB is triggered pursuant to Article 26 of the KOSDAQ Market Business Regulation
Notice of sidecar

The fact that the validity of buy orders (or sell orders) of program trading can be halted when the price of base issue increases (or decreases) by 6 % or more compared to the base price and the KOSDAQ150 index also increases (or decreases) by 3% or more compared to the closing value of the previous trading day, is noticed in the market.

After the notice of sidecar, if the price of base issue stays less than 6 % compared to the base price or the KOSDAQ150 index also remains less than 3% range compared to the closing value of the previous trading day or the trading of base issue is halted pursuant to Derivatives Market Business Regulation, the sidecar is released.