On Thursday at 8 a.m., SK hynix shares on South Korea's alternative trading platform Nextrade instantly hit the 30% downside limit at the start of pre-market trading. According to reports, only 11 shares were traded at 1.168 million won per share, marking a roughly 30% drop from the previous session's closing price of 1.688 million won.
Subsequently, the volatility interruption (VI) mechanism was triggered, switching the trading to a two-minute call auction. After trading resumed, the decline quickly narrowed to between 3% and 4%. By the end of pre-market trading, SK hynix shares had only fallen about 2%, recovering most of the lost ground.
Why did just 11 shares cause a price limit?
The root cause lies in the unique characteristics of pre-market trading mechanics. Nextrade's pre-market session (daily from 8 a.m. to 8:50 a.m.) uses a continuous auction system—buy and sell orders are matched and executed immediately as soon as they align. At the start of the session, there are very few market participants, leading to severe illiquidity, and in extreme cases, a single trade can set the "market price" at that moment.
This differs from the call auction used during regular trading hours. Before the normal session opens, a large number of orders accumulate, and a matching process calculates an equilibrium price, allowing for more thorough price discovery. In contrast, the continuous auction in pre-market lacks this buffer; once someone places an order at an extremely low price and it executes, that price becomes the real-time reference price.
According to reports, on the same trading day, Samsung Electro-Mechanics and Alteogen also saw single-share trades in pre-market, resulting in opening prices that were at the upper limit compared to the previous close—the same mechanism, but in the opposite direction.
Last month's price limit triggered 83 billion won in forced liquidations
This is not the first time SK hynix has encountered such a situation. According to reports, on the 28th of last month, just one share of SK hynix traded at the start of pre-market, triggering a price limit. This abnormal low price was then used by an overseas cryptocurrency derivatives exchange as a reference price for SK hynix's perpetual contract product, leading to approximately 83 billion won in forced liquidations.
TradeXYZ, the creator of the perpetual contract product, stated that it would fully compensate for the losses from this liquidation, but also made it clear that "this compensation is a one-time measure." Following the incident, securities industry insiders in South Korea pointed out that the market needs to be wary of the possibility that forces could deliberately exploit the pre-market opening price to trigger forced liquidations on perpetual contracts.
Nextrade to introduce static VI mechanism from September 14
In response to the consecutive abnormal trading, Nextrade announced that it will officially introduce a static volatility interruption (VI) mechanism starting September 14. According to reports, the trigger condition for this mechanism is: if the declared price deviates from the previous trading day's closing price or reference price by 10% or more, the system will not immediately match the order. Instead, it will automatically switch to a two-minute call auction, during which it will collect orders, calculate an equilibrium price, and then resume trading.
The logic behind this mechanism is akin to a "mandatory cooling-off period"—it pauses immediate execution when prices deviate abnormally, giving the market time to rediscover a fair price, thereby preventing a single extreme quote from directly forming a transaction price.
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