According to the exchange on the 22nd, Neosapience (0161M0), which listed on the Kosdaq market the previous day, closed the regular session at 34,300 won. Its first trade in the after-hours market then jumped to the ceiling price of 40,000 won — 400% of the 10,000 won offering price and the upper bound for a debut day. Within less than a minute, however, the stock fell to 33,050 won, a 17.38% drop from its high. The first minute closed at 34,550 won on volume of 256,653 shares. Anyone who bought at 40,000 won right at the open was instantly sitting on double-digit losses. The stock ended the after-hours session at 36,900 won.
One reason the sharp price swing went unchecked is that newly listed stocks are exempt from VI on their first trading day. The exchange applies the same VI standards in the after-hours market as in the regular session. The mechanism halts immediate execution when a stock moves beyond a certain threshold, switching to single-price auctions to give investors time to reassess the price.
Newly listed shares, however, have been exempt from VI since 2021 on the grounds of smoother price discovery. Under current rules, new listings may trade between 60% and 400% of the offering price on their debut day — from 6,000 won to 40,000 won in Neosapience's case. That range applies in the after-hours market as well. This time the first trade came at 40,000 won, but if sell orders had piled up instead, the price could have fallen as low as 6,000 won. With trading hours now extended to 8 p.m. under the after-hours market, some argue it is worth reexamining whether the exemption should carry over into the post-close session.
The separation of order books between the regular session and the after-hours market also amplified volatility. When the regular session ends at 3:30 p.m., unfilled orders lapse, and a new order book forms when the after-hours market accepts fresh orders at 4 p.m. With orders thin right after the open, prices can move sharply in an instant if buying or selling pressure concentrates on one side. "If we move to a 'one-board' system where regular-session and after-hours orders are processed on a single order book, price swings caused by the break in order flow could be partly reduced," a financial investment industry official said.
The exchange plans to shift to a one-board system by the end of next year. Once in place, greater order continuity between the regular and after-hours sessions could ease price discontinuity. Still, the low liquidity of the after-hours market and the absence of VI on debut day would remain.
Price distortions stemming from the VI exemption and fragmented order books may not be confined to a handful of investors. On its listing day, Neosapience traded 33,873,840 shares worth about 978.17 billion won in the regular session and 9,439,376 shares worth about 342.82 billion won in the after-hours market. After-hours volume equaled 27.87% of the regular session and value 35.05% — a sizable amount of post-close trading.
Another industry official said: "If VI had applied, trades wouldn't have executed immediately during a sharp move, giving investors time to judge whether the price was appropriate. But there is no such mechanism. Structurally, someone can get hurt, so it's an issue that needs thought."
