Purpose

The volatility interruption (VI) is a measure to ease volatility of individual stocks by providing market participants with a short-term cooling-off period (periodic call auction for 2 minutes) in cases of temporary sharp price change due to such factors as errors in order placement process and supply-demand imbalance.

Main contents
Subject
  • Stocks, DRs, ETFs, beneficiary certificates (Stocks and DRs for KOSDAQ market)
VI-Types
  • Dynamic Volatility Interruption
    A tool to relieve a temporary volatility due to supply-demand imbalance or order errors
  • Static Volatility Interruption
    A tool to relieve a cumulative and longer-term price volatility caused by a specific single quotation or multiple quotations
  • Reference prices
    Reference prices
    Dynamic VI Static VI
    The price determined immediately before submission of quotation The price determined at the last single price auction before placing orders
    • Before determining opening price : The base price of the day
    • After determining opening price : The price determined at the last single price auction
  • VI triggering price: Reference Price ± (Reference Price×VI rate)
    VI triggering price: Reference Price ± (Reference Price×VI rate)
    Classification Dynamic VI Static VI
    Continuous Auction
    (09:00∼15:20)
    Closing Auction
    (15:20∼15:30)
    Off-hours Single Price Auction
    (16:00∼18:00)
    Regular Session
    KOSPI200 constituents KOSPI200/100/50, KRX100,Inverse, Bond 3% 2% 3% 10%
    Others stocks Leverage, Sector, and foreign indices, commodity index and others 6% 4% 6%
    Fn. 1)
    A separate Dynamic VI rate (1%) is applicable for the underlying stocks of derivatives products during single price auction at market closing time on the final trading day (second Thursday for each derivative’s delivery month) of the equity-related derivatives products.
    • It is applied to constituents of KOSPI200, KOSTAR index, Sector indices, underlying stock of individual stock futures and options.
      • No limit on the number of triggering in one day.
Processing Method
  • When Dynamic VI or Static VI is triggered, the orders received for 2 minutes are matched by a single price auction (continuous trading is converted to single price auction, and if VI is triggered in the time period of single price auction, the time for the auction is extended).
  • Priority principle for price and time is applicable.
Applied sessions under VI
  • Dynamic VI : continuous trading, single price auction at market closing, off-hour single price auction
  • Static VI : continuous trading, single price auction at market opening and market closing
Exceptions
  • Issues scheduled to be delisted and temporary overheated issues
Avoidance of overlapping application
In case of being overlapped with other price stabilization facilities, only one is applied in principle for the investors’ convenience.
  1. Circuit Breakers (CB)
    At the time of CB execution, other price stabilization facility is cancelled.
  2. Price stabilization facility by issue
    During a single price auction pursuant to a VI, a new price stabilization facility is not executed