The Korea Exchange (KRX) pulled the emergency brake on its KOSDAQ market, activating its sidecar mechanism to temporarily halt algorithmic program trading. The move came in response to sharp movements in the KOSDAQ 150 futures index, a trigger that has become uncomfortably familiar to Korean market participants in recent months.
Think of a sidecar like a circuit breaker’s more targeted cousin. Instead of shutting down the entire market, it specifically pauses program trading linked to futures for five minutes, giving the order book a brief moment to breathe. Regular buy and sell orders continue flowing. Trades in non-index stocks carry on uninterrupted.
How the sidecar mechanism actually works
The KOSDAQ sidecar kicks in under specific conditions. When the KOSDAQ 150 futures index rises more than 6% or drops more than 3-5% and sustains that movement for at least one minute, the exchange automatically suspends algorithmic program trading.
The pause lasts exactly five minutes. It targets only the high-speed, futures-linked algorithmic trades that can amplify price swings in volatile conditions. Everything else on the exchange keeps functioning normally.
