Analysis of the Impact of Korea Exchange's 24-Hour Trading System on Asian Retail Investors and Capital Flows

The 24-hour trading system recently announced by the Korea Exchange (KRX) is a core component of its capital market internationalization strategy. According to the roadmap released by South Korea’s financial authorities, the system will be implemented in phases [1].

: South Korea will first launch 24-hour KRW trading in July 2026, breaking the previous de facto closure at 2:00 AM, allowing overseas investors to trade KRW at real-time exchange rates [2]. : Currently, the South Korean stock market has a daily trading duration of 6.5 hours. The exchange is promoting an extension to 12 hours per day, and may further study a 24-hour trading mechanism in the future [1].

This reform has far-reaching strategic significance. The South Korean government has clearly stated that the launch of the 24-hour foreign exchange trading system is a key measure to secure an upgrade to MSCI’s Developed Markets Index. MSCI currently identifies 6 “deficient” areas in South Korea, with foreign exchange liberalization being a critical one. South Korea aims to enter MSCI’s watchlist in June 2026 and secure the developed market upgrade in 2027 [2].

To support the 24-hour trading system, South Korea has simultaneously introduced a number of supporting measures:

Reform Area	Specific Measures
Settlement Infrastructure	Establish an offshore KRW settlement system to allow foreign financial institutions to complete trade settlements during nighttime hours
Account Structure	Introduce a functional integrated account settlement structure, enabling global custodians to manage settlement accounts on behalf of multiple funds
Investor Identification	Advance the upgrade of the investor identification system based on Legal Entity Identifiers (LEI)
Information Disclosure	Accelerate the implementation of mandatory English disclosure by listed companies, advancing the timeline to March 2027 to cover all KOSPI and major KOSDAQ companies
Foreign Exchange Benchmark	Promote the inclusion of KRW in the World Market Refinitiv Global Reference Exchange Rate Benchmark

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Major Asian exchanges are caught in an intense “time race”, competing with each other to extend trading hours in order to capture global investors. This competitive landscape has emerged from the growing demand for trading convenience among investors amid globalization, as well as the fierce competition among exchanges for liquidity and market share.

is the most landmark development. Nasdaq has announced plans to implement a 24-hour trading system (5 days a week) starting from the second half of 2026, which will mark the first time a major securities exchange has implemented true round-the-clock trading [3]. This move has triggered a chain reaction among Asian exchanges, prompting them to re-examine their own trading hour arrangements.

is also notable. HKEX Chief Executive Officer Bonnie Chan Yiting stated that HKEX is adopting a cautious, gradual extension strategy [3]. Specifically, the first phase proposes extending the closing time to 6:00 PM to align with the early trading hours in Europe; subsequent phases will further align with the early trading hours in the US, enabling 24-hour trading for some Hong Kong stocks during off-hours through American Depositary Receipts (ADRs). In the medium to long term, HKEX is exploring the launch of a 24-hour, 5-day trading model for high-liquidity stocks [3].

provides a useful reference. The TSE has extended its trading hours by 30 minutes, and as early as 2007, the Osaka Securities Exchange (now Osaka Exchange) launched an evening trading session. This extension primarily serves non-Japanese foreign traders, while also attracting a growing number of Japanese retail investors to participate [4].

Exchange	Current Trading Duration	Extended Trading Hour Plan	Features
Nasdaq (US)	6.5 hours	Implement 24/5 trading in 2026	The world’s first all-day stock trading platform
London Stock Exchange (LSE)	8.5 hours	Maintain current status	Hub of European trading sessions
Hong Kong Exchanges and Clearing Limited (HKEX)	5 hours	Phased extension to 6-8 hours	Currently consulting market opinions
Singapore Exchange (SGX)	7 hours (including lunch break)	Maintain current status	Closed from 12:00 PM to 1:00 PM for lunch
Tokyo Stock Exchange (TSE)	4.5 hours	Has extended by 30 minutes	Decentralized trading sessions
Korea Exchange (KRX)	6.5 hours	First extend to 12 hours, then study 24-hour trading	Core of the MSCI upgrade strategy

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The implementation of KRX’s 24-hour trading system will significantly enhance the trading flexibility of retail investors. According to industry analysis,

[3]. This expected growth stems from the following mechanisms:

. Asian retail investors are distributed across different time zones, and the traditional 6-8 hour trading window is difficult to meet the needs of all investors. The 24-hour trading system will cover the three major trading sessions in Asia, Europe, and the US, enabling investors from Japan, South Korea, mainland China, Taiwan, Hong Kong, Southeast Asia, as well as the Middle East and Europe to participate in the South Korean market at a time suitable for them.

. Retail investors often need time to digest information, research fundamentals, and analyze technical patterns. After extending trading hours, investors no longer need to wait for the next trading day’s opening during the “information vacuum period” after the market closes. They can adjust their positions in a timely manner based on the latest information, reducing losses caused by excessive overnight risk exposure.

. Traditionally, institutional investors, relying on their information and trade execution advantages, “squeeze” retail investors during the opening and closing sessions. The 24-hour trading system will disperse trading volume, reduce concentrated competition in a single session, and provide a more level playing field for retail investors.

is one of the most direct impacts of the 24-hour trading system. The 24-hour, 5-day operation model of the global foreign exchange market shows that round-the-clock trading does increase market participation. South Korean retail investors are known for their activity, and the 24-hour trading system may further stimulate their trading enthusiasm, with the average daily trading frequency possibly increasing by 20%-30% compared to the current level.

also deserves attention. After KRX implements 24-hour trading, the overlap in trading sessions with other Asian exchanges, as well as US and European markets, will increase. Retail investors proficient in technical analysis may exploit price differences across different sessions for cross-market arbitrage, which requires investors to have a stronger global market perspective and more sophisticated trading strategies.

cannot be ignored either. 24-hour trading means that news, announcements, and economic data may be released at any time. Retail investors need to establish more comprehensive information monitoring and rapid response mechanisms; otherwise, they may be at a disadvantage due to information lag. This may accelerate the popularization of quantitative trading tools and AI-assisted investment decision-making among retail investors.

KRX’s 24-hour trading system is expected to reshape the nationality structure of investors. According to the policy design of South Korea’s financial authorities, the new system has been optimized specifically for the convenience of foreign investors [2]:

• Strategic Attraction of Middle Eastern Investors
  : HKEX’s analysis points out that extending trading hours helps attract international investors from time zones such as the Middle East [3]. KRX’s 24-hour system can also cover the Middle Eastern trading session. Considering the growing allocation demand of Gulf State sovereign wealth funds for Asian markets, this policy may bring considerable incremental capital.
• Convenient Participation for Southeast Asian Retail Investors
  : Southeast Asia is an important trade partner and investment source for South Korea. The 24-hour trading system will enable retail investors from Indonesia, Thailand, Vietnam, Malaysia, and other countries to participate in the South Korean market more conveniently. In particular, tech giants such as Samsung Electronics and SK Hynix have strong appeal to young investors in Southeast Asia.
• Potential Growth of Japanese Investors
  : Japan is geographically close to South Korea, but differences in trading sessions have long been one of the factors restricting Japanese investors from participating in the South Korean market. The 24-hour trading system will significantly improve this issue.

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is the most direct capital flow effect of the 24-hour trading system. As the fourth-largest economy in Asia, South Korea’s stock market has a total market capitalization of approximately USD 1.74 trillion, with 2,519 listed companies [5]. The 24-hour trading system will significantly reduce the friction costs for foreign investors to enter the South Korean market, and is expected to attract more international capital to allocate to KRW-assets.

According to the expectations of South Korea’s financial authorities, foreign exchange liberalization reforms will help South Korea establish a more stable long-term investor base, reducing the volatility of stock prices and cross-border capital flows [2]. The achievement of this goal will depend on the systematic nature of institutional reforms and the completeness of supporting measures.

also deserves attention. When major Asian exchanges successively extend their trading hours, investors will reallocate their attention resources and trading capital across different markets. For example:

• International investors who originally mainly participated in the Hong Kong market may divert part of their capital to the South Korean market
• Asian retail investors who originally only invested in Japanese stocks may expand their investments to the South Korean market
• Asian investors who originally participated in the US market through ADRs may return to the Asian local market

HKEX and KRX are engaged in a subtle competition, with both taking attracting international investors as their core goal, but their strategic paths are different:

: As the world’s third-largest financial center, Hong Kong has connectivity mechanisms with the mainland capital market (Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect, Bond Connect), providing a more direct channel for foreign capital to enter the Chinese market. Foreign investors account for approximately 41% of the turnover in Hong Kong’s securities market, with US investors accounting for about 10% [5].

: South Korea has global competitiveness in cutting-edge technology fields such as semiconductors, artificial intelligence, and electric vehicles. Companies such as Samsung Electronics and SK Hynix occupy key positions in the global industrial chain. The 24-hour trading system, combined with the expectation of MSCI index upgrade, may attract more international capital seeking to allocate to Asian tech leaders.

: In the next few years, Hong Kong and South Korea may form a differentiated competitive pattern. Hong Kong will continue to consolidate its role as a bridge connecting mainland China and international capital, while South Korea is committed to becoming a gateway for Asian tech stock investment. This competition may ultimately enhance the overall attractiveness and liquidity of Asia’s capital market, rather than being a simple zero-sum game.

will be one of the significant impacts of the 24-hour trading system. According to the evening trading experience of the Osaka Exchange in Japan, the main participants in the nighttime session are foreign institutions and Japanese retail investors [4]. The South Korean market may show similar characteristics:

• Asian Session (09:00-16:00 KST)
  : Dominated by South Korean retail investors and Asian institutional investors
• European Session (16:00-22:00 KST)
  : Increased participation by European institutions and Asian retail investors
• American Session (22:00-09:00 KST)
  : Participation by US institutions and Asian retail investors

This distribution will significantly smooth the intraday trading volume curve of the South Korean market, reducing the traditional “spike” phenomenon during the opening and closing sessions.

also deserves attention. Studies show that extending trading hours may reduce the risk of opening gaps, as more information is gradually digested during non-trading hours. However, this may also lead to a more even distribution of volatility across all trading sessions, increasing intraday volatility in some sessions.

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is the primary challenge faced by the 24-hour trading system. The exchange needs to ensure that the trading system operates stably over a longer time window, and any system failure may affect the trade execution of global investors. Hiroo Yamamoto, Chief Executive Officer of the Japan Exchange Group, pointed out that extending trading hours allows the exchange to “restart as soon as possible in the event of a system failure” [4], indicating that the exchange has incorporated system resilience into its considerations.

cannot be ignored either. 24-hour trading involves coordination among regulatory agencies in different time zones, including the Financial Services Commission (FSC) of South Korea, the Financial Supervisory Service (FSS), the U.S. Securities and Exchange Commission (SEC), and the European Securities and Markets Authority (ESMA), among others. Cross-border regulatory cooperation and law enforcement assistance mechanisms need to be further improved.

is an issue that regulatory authorities need to focus on. Studies show that more convenient trading channels may lead to an increase in investors’ trading frequency, but not necessarily better investment returns. Asian retail investors are known for their “day trading” culture, and the 24-hour trading system may exacerbate this problem.

is another hidden danger. Although South Korea plans to accelerate the implementation of English disclosure by listed companies [2], there may still be a time lag in information acquisition among investors of different languages. In addition, major news and emergencies may occur at any time, and retail investors without professional research support may be at an information disadvantage.

cannot be ignored either. The 24-hour trading system may increase investors’ decision fatigue and anxiety, especially for retail investors who try to capture all trading opportunities. Financial education and investment risk warnings need to be strengthened accordingly.

is a common problem with extended trading hours. Trading volume in non-core trading sessions may be significantly lower than in core sessions, leading to wider bid-ask spreads and worse execution prices. Some low-liquidity stocks may face a situation of “prices exist but no market” during non-core sessions.

may exacerbate market unfairness. Institutional investors with advanced algorithms and high-speed trading facilities may exploit price differences across different sessions for arbitrage, while retail investors lacking technical capabilities may be “fleeced”. Exchanges need to consider introducing protective measures such as dynamic circuit breakers.

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Looking forward to 2027 and beyond, the Asian capital market may present the following evolutionary patterns:

: Nasdaq takes the lead in implementing 24/5 trading, and South Korea and Hong Kong successively launch extended trading hours. Each exchange is still in the adaptation period, and trading volume growth may be lower than expected, but infrastructure upgrades are basically completed.

: Major Asian exchanges basically achieve more than 12 hours of trading, covering the Asian and European sessions. Investors gradually adapt to the new trading rhythm, and cross-market capital flows increase.

: Technological progress makes 24-hour stock trading possible, and some high-liquidity stocks may take the lead in realizing true round-the-clock trading. The Asian capital market forms a true global 24-hour relay with New York and London.

. The 24-hour trading system provides more opportunities, but also requires investors to invest more time and energy. Investors should assess whether they have the ability to continuously monitor global market dynamics, and avoid over-trading in pursuit of trading opportunities.

. Faced with a longer trading window, investors should establish clear trading rules, including entry conditions, stop-loss disciplines, and position management, to avoid emotional decision-making in volatile markets.

. Consider using trading alerts, quantitative indicators, and AI-assisted tools to monitor market dynamics, improve information processing efficiency, and control the risk of technological dependence at the same time.

. The 24-hour trading system enhances the linkage between the Asian market and global markets. Investors need to analyze the South Korean stock market in the context of the global macroeconomy, and pay attention to the impact of US stock trends, exchange rates, and commodity trends on South Korean stocks.

. Referring to the experience of Nasdaq and HKEX, extending trading hours should adopt a gradual strategy, fully consult the opinions of market participants, and make dynamic adjustments based on actual effects.

. Synchronously strengthen investor protection and education in conjunction with institutional reforms, help retail investors understand the risks and opportunities of 24-hour trading, and establish a correct investment mindset.

. Establish communication mechanisms with major exchanges and regulatory authorities to ensure rapid coordinated responses in the event of major incidents, and maintain market fairness and investor confidence.

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KRX’s 24-hour trading system is a milestone event in the internationalization process of the Asian capital market. It will not only reshape the trading pattern of the South Korean market, but also trigger a chain reaction among Asian and even global exchanges. From the perspective of retail investors, the new system provides greater trading flexibility and more investment opportunities, but also brings higher participation thresholds and more complex risk management requirements.

From the perspective of capital flows, the 24-hour trading system is expected to enhance the attractiveness of the South Korean market to international investors. Combined with the expectation of MSCI index upgrade, it may bring considerable incremental capital. However, the achievement of this goal also depends on the improvement of supporting systems, the reliability of market infrastructure, and the effectiveness of regulatory coordination.

Looking to the future, the Asian capital market is accelerating its evolution from a “regional market” to a “global market”. Competition and collaboration among exchanges in South Korea, Hong Kong, Japan, Singapore, and other regions will shape a new Asian financial landscape. In this process, retail investors need to continuously improve their professional capabilities, exchanges need to continuously optimize services, and regulatory authorities need to improve the rule system with the times, to jointly promote the healthy and sustainable development of the Asian capital market.

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[1] 21st Century Business Herald - “KRX’s Rhee Dae-ho: Semiconductors + AI Drive South Korean Stocks, Broad Space for China-South Korea Capital Market Cooperation” (https://www.21jingji.com/article/20251208/herald/57df3d66025eef832397c3dadad5c3e6.html)

[2] The Korea Herald - “Korea to open FX market around the clock from July” (https://www.koreaherald.com/article/10652348)

[3] China Daily Hong Kong - “HKEX aims to fight off international rivals with longer trading hours” (https://www.chinadailyhk.com/hk/article/618664)

[4] FIA - “The Market Never Sleeps: The Success of Extended Trading Hours at JPX” (https://www.fia.org/marketvoice/articles/market-never-sleeps-success-extended-trading-hours-jpx)

[5] ASIFMA - “Korea Capital Markets 2022 and Beyond Opportunities and Challenges” (https://www.asifma.org/wp-content/uploads/2023/03/korean-capital-markets-2022-and-beyond.pdf)