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)
주의 As of Oct 18th, 2021, for newly listed stocks and global DRs and transfers from the KONEX to KOSDAQ, VI will not be applied on the day of the IPO(only for the day).
(Yet the VI will still be applied to transfers from the KOSDAQ to KOSPI or from the KOSPI to KOSDAQ)
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 last execution price
    (when there is no first execution price in the after-market then the reference price is the closing price of the regular market)    		 The price determined at the last periodic call auction before placing orders
    • Before determining the opening price: Base price of the day(previous day’s closing price)
    • After determining the opening price : A price determined at the last periodic call auction
    • When there is no previous periodic call auction price in the after-market then the reference price is the closing price of the regular market
  • 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)    		 After-market
    (16:00∼20:00)    		 Regular Session,
    After-market
    KOSPI200 constituents 3% 2% 3% 10%
    General issues in KOSPI market, KOSDAQ issues 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, KOSDAQ150 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(Regular session, After-market), single price auction at market closing
  • Static VI : continuous trading(Regular session, After-market), 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