According to Financial Times News, an upstart stock exchange called Nextrade has captured nearly a third of South Korea’s $2.4 trillion stock market by value in just eight months since its March launch. By November, it was handling daily trading worth about 11 trillion won ($7.4 billion), roughly double the volume of the entire Singapore Exchange. The platform’s explosive growth is fueled by domestic retail investors, who make up a whopping 85% of its trading value and are known for high-risk strategies. This surge in activity has contributed to South Korea’s main index gaining 75% this year, making it the world’s best-performing major market. In response, regulators introduced a rule in late October to cap Nextrade’s volume at 15% of the main Korea Exchange (KRX), forcing Nextrade to halt trading in popular stocks like Kakao to comply. CEO Kim Hak-soo called the growth “exceptional,” noting it took similar alternative exchanges in Japan and Australia about a decade to reach this level.
Why Traders Are Flocking There
So, how did this happen so fast? Basically, Nextrade nailed the two things day-traders love: longer hours and lower costs. It offers 12 hours of trading compared to KRX’s six and a half, which lets white-collar workers trade during their commutes. And its fees are 20 to 40% cheaper. For South Korea’s army of aggressive retail investors—who have famously piled into everything from meme stocks to crypto—this was a no-brainer. They have, as CEO Kim put it, “no resistance against new systems or technology.” But here’s the thing: Nextrade is just a trading venue. It doesn’t handle listings, clearing, or market monitoring. That’s all still done by KRX. It’s a bit like a new, cheaper, all-night diner opening next to the only restaurant in town, but the original restaurant still has to cook the food and wash the dishes.
The Regulatory Crackdown And Risks
The sheer speed of Nextrade’s rise clearly spooked regulators. That new 15% volume cap is a massive brake, and it’s stricter than similar rules in places like Japan. To meet it, Nextrade had to delist hundreds of stocks, now offering about 630 compared to nearly 800 at launch. A researcher from the Korea Capital Market Institute warned this rule “risks undermining the original policy intent” of fostering competition. You have to wonder: is the goal to create a safe, competitive market, or just to protect the incumbent? The regulators are in a tough spot. More liquidity and competition is good, but when 85% of the volume on a new platform is from famously speculative retail traders, you can see why they’d want to pump the brakes. It introduces a whole new layer of systemic risk that wasn’t there before.
BTS ETFs And The Future Fight
Now, the battle is heating up. KRX is on alert, temporarily cutting fees and considering longer hours itself. Nextrade isn’t standing still either. Its plans are… wild. CEO Kim wants to introduce digital tokens linked to K-pop song licenses—imagine trading a securitized slice of a BTS track—and leveraged ETFs. They’re prepping “riskier” ETF products for next year to try and lure back the billions South Korean investors have sent to US markets for quick returns. This is a full-blown arms race for the attention of the retail trader. And it highlights a global shift: when the public gets deeply involved in markets, they demand convenience, low cost, and frankly, excitement. Nextrade gets that. The old guard is being forced to adapt, and fast. Whether regulators let this experiment continue at full throttle, though, is the billion-won question.
