Korea Stock Exchange

The Korea Stock Exchange (KRX) is the primary securities exchange in the Republic of Korea. It is one of the largest Asian exchanges with over 2,500 listed companies including Samsung, and a market cap of over £1.4 trillion. Korean stock exchange brokers provide investors with access to three key market divisions, which we unpack in this guide. Our traders also explain the history of the Korean Stock Exchange, its trading hours, plus how to compare KRX brokers.

Choosing Korea Stock Exchange Brokers

Trading on the Korean Stock Exchange is available through online brokerages. However, with multiple providers and platforms, it’s worth comparing firms in several key areas:

Instruments

The selection of instruments on offer varies depending on the broker. Some KRX brokers may give you access to index instruments, such as KRX 300 options, KOSDAQ 150 futures and KOSPI 200 options, whilst others may offer CFDs and ETFs, including the iShares MSCI South Korea ETF, available at eToro and IG Index.

Note that permission is required if you wish to trade Korea futures.

Fees

Fees should be an important part of your decision, as they can quickly add up and impact your profits, especially with short-term trading strategies.

Typically, retail trades are subject to a spread, though there may also be commissions to look out for. Some Korea Stock Exchange brokers in the market may also charge deposit and withdrawal fees, swap charges and subscription models.

Pepperstone, for example, offers KRX ETF CFDs with a $0.02 (USD) commission per share, per trade. There are exchange spreads and no mark-ups.

Alternatively, Hargreaves Lansdown offers access to KRX ETFs through their Fund and Share Account. Whilst it is free to hold ETFs in the account, a charge between £5.95 and £11.95 is required per UK deal online. There is a maximum annual charge of 0.45%.

Regulation

Regulatory oversight is another key consideration when choosing a Korean Stock Exchange broker, as it will ensure retail traders receive appropriate financial protection.

Reputable financial regulators such as the UK’s Financial Conduct Authority (FCA) ensure that traders’ finances and personal information are protected against scams, fraud and financial misconduct. Key safety features include financial compensation schemes, negative balance protection and segregation of funds.

Platforms

The platforms offered by Korean Stock Exchange brokers will greatly impact your trading experience. Some platforms offer complex technical analysis tools to facilitate comprehensive trading strategies. Other bespoke platforms may be designed with ease of use in mind, making trading simpler and more accessible for beginners.

Popular brand Pepperstone, for example, offers a range of platforms, including TradingView, MetaTrader 4, MetaTrader 5, and cTrader.

Make sure to check which platforms and features are offered before opening an account. Many top Korean Stock Exchange brokers allow you to try out their platforms with free demo accounts, which are typically pre-loaded with virtual funds.

How To Trade On The Korea Exchange

South Korea plans to remove strict stock market regulations to make investment easier for foreign traders. KRX brokers and investors will no longer need to register with authorities in Korea before investing in stocks and instead provide an international identifier upon registration.

As such, the process to sign up with each broker may vary slightly, but we have briefly listed the key steps below to help you get started trading Korean stocks:

1. Find a brokerage – We recommend choosing a trusted broker that offers competitive pricing, a robust platform and any additional tools or features that might suit you. See our list of the best KRX brokers.
2. Register for a trading account – After filling in an online registration form, you may need to verify your identity and submit required documents, including copies of your passport or driver’s license.
3. Fund your account – You can now deposit into your account using your preferred payment method. Be aware of any transaction fees or foreign exchange fees. Beginners should also check the minimum deposit requirement (less than £200 is competitive).
4. Open a position – Once you have decided on an investment vehicle to trade on the KRX, such as a CFD or ETF, and the strategy you wish to use, open a position.
5. Monitor the market – Keep an eye on the market and price movements of your chosen asset and be ready to close out when the time is right.

Price Chart

What Is The Korea Stock Exchange?

The Korea Exchange (KRX) is the main securities exchange operator in South Korea. It was created by the amalgamation of the Korea Stock Exchange, the Korea Futures Exchange and the KOSDAQ Stock Market in 2005.

The exchange is headquartered in Busan but also has an office in Seoul that handles cash markets and market oversight.

The Korea Exchange uses the South Korean won (KRW) as its base currency. It has 2,589 listed companies with a domestic market capitalisation of 2,361 trillion KRW (roughly £1.46 trillion).

History

• 1956 – The Daehan Stock Exchange (the predecessor of the Korean Stock Exchange) was founded
• 1962 – The KSE reorganised into a joint stock corporation
• 1979 – The KSE joined the International Federation of Stock Exchanges (FIBV), now called the World Federation of Exchanges (WFE)
• 1988 – The KSE privatised and incorporated into a membership organisation
• 1992 – Direct investment by foreign investors allowed
• 1994 – The KOSPI 200 index begins publishing
• 1996 – The KOSDAQ market establishes
• 2002 – The options and ETF markets launch
• 2005 – The Korea Stock and Futures Exchange is established by the consolidation of the KSE, KOSDAQ and KOFEX
• 2009 – Name change to the Korea Exchange
• 2018 – Listed KRX300 Futures and KOSDAQ150 Options

Markets

The Korea Exchange is broken into three market divisions: KOSPI, KOSDAQ, and Derivatives.

KOSPI

The KOSPI division is the Korea Composite Stock Price Index market division of the KRX. This division was previously known as the Korea Stock Exchange and makes up the common stocks that were previously traded on this exchange.

This market division consists of:

• Stocks
• Bonds
• Exchange Traded Funds (ETFs)
• Exchange-Linked Warrants (ELW)
• Real Estate Investment Trusts (REITs)

KOSDAQ

The KOSDAQ division is the Korean Securities Dealers Automated Quotations market division of the KRX. It is an electronic stock market benchmarked from the NASDAQ. It was created to modernise and computerise the tradable market.

This market division consists of:

• Stocks

Derivatives

The derivatives market covers all derivative trading products on the Korea Exchange. This includes the KOSPI 200 Index Futures, Korea Treasury Bonds and Lean Hog futures.

This market division consists of:

• Forex
• Commodities
• Options Contracts
• Futures Contracts
• Index Instruments
• Interest Rate Instruments

Indices

The Korea Exchange has released over 384 kinds of indices. The most widely available at KRX brokers are:

• KOSPI: The Korea Composite Stock Price Index tracks the common stocks traded on the stock market (KOSPI) division of the KRX. The index’s calculation is based on the market capitalisation of the companies on the exchange. It is South Korea’s representative stock market index.
• KOSPI 200: While the KOSPI tracks all the stocks on the KOSPI market division, the KOSPI 200 only tracks the top 200 stocks in market capitalisation. This may be better for traders looking to only focus on the major companies on the exchange. This is the most widely traded index on the KRX.
• KOSDAQ 150: The Koran Securities Dealers Automated Quotations is a trading board of the KRX. The KOSDAQ 150 index follows the performance of the top 150 KOSDAQ assets in market capitalisation.
• KRX Indices: The KRX indices follow the entire Korea Exchange. For example, the KRX 300 tracks the 300 largest financial assets on the entire Korea Exchanges.

Largest Stocks

If you want to trade some popular South Korean stocks on the KRX, the top ten by market capitalisation are:

1. Samsung: £265.96 billion
2. LG Energy Solution: £89.47 billion
3. SK Hynix: £39.91 billion
4. Samsung Biologics: £36.72 billion
5. LG Chem: £34.31 billion
6. Samsung SDI: £32.13 billion
7. Hyundai: £26.07 billion
8. Coupang: £22.97 billion
9. Kia: £21.61 billion
10. Naver: £19.86 billion

Trading Hours

The Korea Exchange is open Monday through Friday from 9:00 am to 3:30 pm Korean Standard Time (GMT+09:00). The pre-trading session is between 8:00 am and 9:00 am and the post-trading session is between 3:40 pm and 6:00 pm Korean Standard Time (GMT+09:00).

The KRX trading hours in UK time are:

• Standard opening hours: 0:00 am – 6:30 am (GMT)
• Pre-trading session: 11:00 pm (previous day) – 0:00 am (GMT)
• Post-trading session: 6:40 am – 9:00 am (GMT)

It may be worth looking out for any Korea Stock Exchange brokers that offer extended trading hours and weekend trading.

Market Holidays

The KRX has 13 scheduled market trading holidays:

• Korean New Year – January 23
• Korean New Year – January 24
• Independence Day – March 1
• Labour Day – May 1
• Children’s Day – May 5
• Memorial Day – June 6
• Liberation Day – August 15
• Chuseok Festivity – September 28
• Chuseok Festivity – September 29
• National Day – October 3
• Hangul Day – October 9
• Christmas – December 25
• New Year’s Day – December 29

Bottom Line On The Korea Stock Exchange

Korean Stock Exchange brokers provide UK investors with trading opportunities on one of Asia’s largest exchanges. As South Korean stocks are becoming increasingly accessible for foreign investors, brokers often provide trading through ETFs and CFD index derivatives.

Look for competitive fees, FCA regulation, asset selection and supported payment methods when choosing KRX brokers. Alternatively, sign up with one of the top-rated brokers with access to the Korean Stock Exchange.

FAQ

Article Sources

Korea Stock Exchange Website

‘South Korea Eases Market Rules To Court Foreign Investors’ (Financial Times, 2023)

eToro South Korean ETF Trading Conditions