Korean Derivatives Marker opened in May of 1996 by introducing KOSPI 200 futures. Since then, it has developed into an international exchange following the establishment of the KOSPI 200 Options Market in 1997 and government bond futures and the US dollar derivatives marker in 1999.
Due to the explosive growth of options trading in the KOSPI 200, the KRX Derivatives Market surpassed prominent American, European, and other international exchanges to become world number one in annual trading volume size at 2.7 billion won worth of contracts in 2005. One can say that Korea’s Derivatives Market is leading the world with its dominant derivatives markets.
Tools for managing risk in the rapidly developing financial environment were not efficient until the appearance of KOSPI 200 futures and options, 3-year government bond futures, and US dollar futures after 1996.
In particular, companies and investors alike recognized the importance of risk management during the financial crisis of 1997. Their concerns have been constructive in the development of the current Derivatives Market. The Derivatives Market headquarters have applied these risk management concerns in the establishment of 14 wide-ranging derivatives markets for investors such as stock price indices, bonds and interest rates, currency, products, and individual stock. Furthermore, the cornerstone for the expansion of financial markets will be strengthened through the development of new products.
The establishment of the domestic derivatives markets strengthens the competitiveness of the national financial market in addition to functioning as a risk management tool for investors.
Investors can determine the appropriate market price using arbitrage trading through the linked trading of stocks and bonds in both the spot market and futures and options markets. Furthermore, securities, banks, investment trust, insurance, and other financial institutions use futures and options to develop investment products with diverse yield structures for investors.
The development of our domestic financial markets through futures and options markets is a major contributor to the competitiveness of our nation’s financial industry with advanced financial institutions from around the world.
After the foundation of the KRX, the Derivatives Market Division was resurrected through the only domestic derivatives market within the exchange. Under the banner of “Customer-Focused Management,” one of the three KRX strategies, every effort is being made to maximize trading conveniences for investors.
To offer investors the utmost convenience, we are actively pursuing the maintenance of customer-focused trading systems. In addition, we are striving for the production of cutting-edge trading systems to develop a stable and prompt trading environment. Simultaneously, diverse new products will be developed and offered so that investors can keep up with the constantly changing global financial environment.
Despite being positioned as the world’s greatest derivatives market, the Derivatives Market Division is determined to develop even more. To do so, the division has assigned market stability, already distinguished by its liquidity, and swift completion of transactions as the foundations.
All employees of the Derivatives Market headquarters have unified to strive towards the future as one. The common goals are the development of an emerging Asian market for exports through a superior trading system and the acquisition of no-action letters and designation as government bond exemptions for KOSPI 200 products so that American investors can make a smooth entry into the market. Furthermore, association with prominent global exchanges has been pursued as well as the holding of international conferences.
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