TLDR
- Nextrade has taken nearly 30% of South Korea’s trading value since launching in March.
- The platform operates for 12 hours each day, which is nearly double the Korea Exchange’s trading time.
- Nextrade charges 20 to 40% lower transaction fees compared to the Korea Exchange.
- Retail investors make up 86% of Nextrade’s total trading activity.
- Nextrade’s pre-market session now sees more activity than its post-market hours.
South Korea’s Nextrade has rapidly captured a major share of the country’s $2.4 trillion equity market. The platform, launched in March, now handles nearly 30% of total trading value. This growth has been fueled by lower fees, extended hours, and strong retail participation.
Longer Trading Hours Drive Investor Shift
Nextrade offers 12 hours of trading, far more than the Korea Exchange’s 6.5-hour session. It begins before the KRX opens and continues into the evening. This extended window gives investors more flexibility and timing advantages.
Retail traders have flocked to Nextrade’s early morning pre-market session, which is now busier than its post-market hours. KRX operates from 9 a.m. to 3:30 p.m., while Nextrade runs until 8 p.m. As a result, many stocks see more action on Nextrade during morning hours.
Some stocks, such as Doosan Enerbility, now trade more on Nextrade than on the 70-year-old KRX. The shift reflects changing market behavior and preference for faster platforms. Retail investors now account for 86% of Nextrade’s trading activity.
Lower Fees, Better Prices Win Over Retail
Nextrade charges 20–40% less in transaction fees than KRX, attracting cost-sensitive retail investors. The platform also allows more price-setting options for flexible trading. These benefits have helped Nextrade gain order flow rapidly.
Brokers auto-select Nextrade when it offers better pricing, boosting its visibility among retail traders. This system has made it easier for users to execute trades efficiently. “Investors get better deals without even asking,” one brokerage analyst said.
Though Nextrade does not support IPOs, its popularity continues to surge. Foreign investors have started joining the platform, rising from 0% to 11% participation. However, domestic institutions remain cautious, citing “system stability concerns.”
Nextrade has not experienced major outages since launch, yet institutions are slow to switch. Regulatory caps on trading volume have limited some activity. Still, Nextrade’s performance remains strong under current restrictions.
Regulatory Pressure Rises as Nextrade Expands
In September, regulators lifted a 30% single-stock cap temporarily after 500 stocks crossed the trading threshold. This move was necessary to avoid freezing activity on many stocks. “It would become impossible for investors to trade during their commute,” said the FSC in a statement.
However, a 15% cap on total market volume remains. To comply, Nextrade paused trading on nearly 150 stocks in August and September. This has limited its total market share by volume, despite higher value turnover.
Compared globally, Nextrade’s rise is unique. In the U.S., over 80 ATS platforms handle only 20% of trading value. In Japan, three ATS firms share just 10%, showing Nextrade’s pace is exceptional.
Nextrade’s legal framework began in 2013 but approval came in 2023. CEO Kim Haksoo, a former regulator, now leads the company. South Korea is also in tariff talks with the U.S., aligning trade goals with market modernization.
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