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KRX to expand Korean won contract on Eurex

The Korea Exchange’s Seoul office in Yeouido (KRX)
The Korea Exchange’s Seoul office in Yeouido (KRX)
South Korea’s sole bourse operator, the Korea Exchange, and the Eurex Exchange will expand their tradable product range through the Korean won contract starting July 26, officials said Tuesday.

Regular trading hours will be set between 6 p.m. and 5 a.m. here. Incomplete contracts from the night session will be transferred to the local bourse operator’s regular derivative market, they said.

The new forex future contract will complement the Kospi 200 options, the Mini-Kospi futures and the recently launched Kospi 200 futures. The US dollar/Korean won futures contract is fully fungible with the corresponding contract listed on the domestic bourse, like other Eurex and KRX link products.

In 2010, Eurex started trading Kospi 200 options, making trading in Kospi products possible after markets close in Korea. While the average daily volume at Eurex in June marked 57,000 contracts, it logged the most heavily traded benchmark worldwide of 50,000 contracts.

The upcoming product listing is another opportunity for the partner exchanges to expand their link by connecting markets globally and around the clock through their decadelong commitment, they said.

“Following a successful launch of Eurex Kospi 200 futures on March 22, the upcoming listing of the first FX futures on the link -- USD/KRW futures on the KRX-Eurex link market -- will provide investors with an opportunity to manage their foreign exchange risks on a 24-hour basis,” said Sohn Byung-doo, chairman of the Korea Exchange.

“South Korea is one of the world’s leading exporting nations. For financial institutions, corporates, and investors -- whether in Asia, Europe or the US -- this FX futures contract is a valuable tool to facilitate exposure to Korean won and manage currency risk around the clock,” said Michael Peters, chief executive officer of Eurex.

Meanwhile, Eurex is the only after-hours trading venue that offers global market participants access to the Korean market outside the country’s regular trading hours.

As of the first half of this year, Kospi 200 options trading during the night session came to 2.5 percent of all trading. Mini-Kospi futures and Kospi 200 futures recorded 4.2 percent and 1 percent, respectively.

By Jie Ye-eun (