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