Sudden Plunge on a Single Share Trade Sparks Fury Over Wiped-Out 80 Billion Won

It has been confirmed that a single share of SK Hynix traded at the lower limit on a domestic alternative trading system triggered a forced liquidation worth 80 billion won in overseas derivatives markets.

While the price immediately recovered its normal level domestically, overseas trading platforms reflected the price as it was, causing losses to snowball.

Shortly after the pre-market opened on the alternative trading system Nextrade on the 28th, a single share of SK Hynix was executed at 1.272 million won, 30 percent lower than the previous day's closing price.

As buying pressure subsequently flowed in, the stock price immediately returned to normal levels.

However, the problem occurred on a 24-hour overseas decentralized stock derivatives platform.

Instead of directly fetching domestic stock market quotes, this platform calculates benchmark prices through a price information delivery system called an "oracle."

As the lower limit price executed on Nextrade at the time was transmitted through the oracle, the overseas platform recognized the price of SK Hynix as having plummeted by about 18 percent.

Consequently, losses on accounts invested in a rise in stock prices surged all at once, and accounts whose losses exceeded a certain level were automatically liquidated, resulting in the forced settlement of investment contracts worth approximately 57.4 million dollars, or about 80 billion won in Korean currency.

This incident clearly demonstrated that temporary abnormal trades in the domestic market can be immediately propagated to overseas derivatives markets.

In particular, experts point out that the Nextrade pre-market has low trading volume right after opening, meaning that even a single share trade like this can be recognized as the market price and impact overseas markets.

Experts noted that improving the spot market system alone has limitations, suggesting that price verification systems for oracles transmitting price information must also be strengthened by introducing minimum trading volume criteria, reflecting prices from multiple exchanges, or applying moving average prices over a certain period.

Nextrade plans to introduce a static volatility interruption (VI) device starting next September, which will switch trading to single-price auctions in the event of sharp stock price fluctuations.

(Reported by Kim Minjeong | Video by Lee Eui-sun | Graphics by Lee Su-min | Produced by SBS Digital News)
※ Please note: This article was translated by AI and may contain errors.