Korea's circuit breakers: 8, 15, 20 — then the day ends
Korean circuit breakers fire at 8%, 15% and 20% index drops sustained for one minute
The three lines
- Halts trigger when the index falls 8%, 15% or 20% from the prior close for one minute
- Stages one and two stop all trading for 20 minutes; stage three ends the session
- The system fired three times in each of June and July, unprecedented back to back
Key questions
- How do Korean circuit breakers work
- If the KOSPI or KOSDAQ falls 8%, 15% or 20% below the prior close and holds there a minute, trading halts by stage. Stages one and two pause everything for 20 minutes; stage three closes the market for the day.
- What is a sidecar in Korean markets
- A lighter brake: sharp futures moves suspend program trading orders for five minutes. It fires far more often than circuit breakers — July had only three sessions without either mechanism triggering.
- What happens to my orders during a halt
- During a stage one or two halt, trading stops for 20 minutes, then orders collect in a 10-minute single-price auction before continuous trading resumes. Stage three simply ends the day.
In July, the Korean stock market had exactly three sessions in which neither of its emergency brakes engaged. For readers who watched Seoul trip halts on consecutive days and then post the largest one-day gain in its history, here is how the machinery actually works — written to be linked to, not just read once.
1. The mechanism
Korea's circuit breaker halts the entire cash market when the KOSPI or KOSDAQ index falls a set distance below the prior day's close and stays there for one minute. The thresholds run 8%, 15% and 20%.
Stages one and two (8% and 15%) freeze all trading for 20 minutes, after which orders accumulate in a 10-minute single-price auction before continuous trading resumes. Stage three (20%) ends the session outright. Each stage can fire only once per day, and stages one and two cannot trigger in the final 40 minutes of trading.
2. The numbers
| Stage | Trigger (vs prior close, held 1 min) | Effect |
|---|---|---|
| 1 | −8% | all trading halted 20 minutes |
| 2 | −15% | all trading halted 20 minutes |
| 3 | −20% | session ends |
The companion mechanism, the sidecar, is frequently confused with it. Sidecars respond to sharp futures moves by suspending program-trading orders for five minutes — a targeted, lower-threshold brake that fires routinely. July's "three quiet sessions" statistic counts both mechanisms together.
The recent frequency is the historical anomaly: circuit breakers proper fired three times in June and three more in July — back-to-back months of three, which had never happened since the system's introduction. Whatever else that indicates, it means a mechanism designed as a rarity briefly became weekly furniture.
3. What is still open
Per-halt trigger and resumption timestamps await cross-checking against the exchange's official log and are not tabulated here. Whether August adds to the count is prediction, and this site does not publish predictions as facts.
For the market context that made July historic — the leveraged unwinding behind the falls and the record rebound that followed — see the deleveraging explainer and the week-ahead piece published the same day.