On July 13th, South Korea's KOSPI index plummeted over 8%, triggering the market's circuit breaker mechanism and halting all trading for a 20-minute period. This marks the seventh occasion this year that the Korean stock market has activated this safety protocol.
According to available statistics, from the start of the year to the present, the Korean stock exchange has triggered its "sidecar mechanism"—which suspends program trading—more than 30 times. This figure already exceeds the 26 instances recorded during the 2008 financial crisis. Furthermore, the activation of the full-market circuit breaker, which pauses all trading, has occurred seven times this year. These seven instances account for half of the total 12 times this mechanism has been triggered since its implementation in the year 2000.
The Bank of Korea recently issued a warning, stating that single-stock leveraged exchange-traded funds (ETFs) tied to major companies like Samsung Electronics and SK Hynix could potentially heighten market concentration, amplify overall market volatility, and reinforce one-sided trading capital flows.