The Korea Exchange held the anniversary event May 6 at the Lotte Hotel in Busan, drawing about 200 people from the government, the National Assembly, the city of Busan, related institutions and the financial investment industry. The domestic derivatives market began with the listing of KOSPI 200 futures on May 3, 1996. The event was also aimed at highlighting the market’s role in Busan, a financial hub.
Derivatives are contracts based on future prices and are a core part of capital-market infrastructure, serving both risk management and price discovery. Companies and investors use futures and options to hedge risks tied to interest rates, exchange rates and stock prices, supporting more efficient allocation of resources.
After the 1996 launch, the market expanded rapidly. In 2001, it ranked No. 1 globally by trading volume and held the top spot through 2011. Access has also widened through steps including a night futures market linked to the Chicago Mercantile Exchange in 2009 and, more recently, the introduction of its own night market.
Today, products tied to stock indexes, individual stocks, interest rates and currencies trade in Korea’s derivatives market, which the exchange described as a leading market in Asia. Foreign investors account for about 68% of participation, while retail investors have stabilized at around 20%.
In opening remarks, Korea Exchange Chairman Jeong Eun-bo said the derivatives market has continued to grow as Korea’s capital markets seek to move beyond the “Korea discount” toward a global premium. He said the exchange will do its part to strengthen Busan’s global competitiveness and support the local economy by attracting international derivatives conferences and helping develop financial talent in the city.
Ahn Chang-guk, a standing commissioner of the Financial Services Commission, said in congratulatory remarks that the derivatives market has improved stability and efficiency through risk management, liquidity provision and price discovery despite shocks including the foreign exchange crisis, the global financial crisis and the COVID-19 pandemic. He said product innovation, stronger market surveillance and a sound investment culture are important to enhancing global competitiveness, adding that the government will stay in close communication with the market and play its necessary role.
Looking ahead, the Korea Exchange said it will expand its product lineup and upgrade trading infrastructure. It plans to introduce “zero-day options” by diversifying weekly option expirations based on the KOSPI 200 and KOSDAQ 150, and to gradually increase the number of single-stock futures and options available.
The exchange also plans to develop green finance products such as emissions-permit futures and, subject to regulatory improvements, to pursue crypto-asset-based derivatives. To support market stability, it said it will strengthen volatility-mitigation tools and market surveillance systems, and will consider a longer-term shift to a 24-hour trading system.
To broaden the investor base at home and abroad, it said it will step up joint marketing and education programs and pursue investor outreach in major global cities.
An exchange official said the market’s growth from a single futures product 30 years ago to a global market was made possible by participants’ trust and involvement. The official said the exchange will focus not only on expanding volume but also on building a sound market that earns investors’ confidence.
* This article has been translated by AI.
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