KOSPI · November 11, 2010

What happened at the options expiry

-2.70%

single-day change vs previous close

Part of a longer stretch

Seven months back to a record

near the end of it · 2010-05-25 → 2011-01-03, +32.63% over the whole period

What happened that day?

The KOSPI fell 2.7% on the day — but most of the fall happened in the last ten minutes before the close
It was an options expiry. A foreign brokerage placed a huge sell order into the closing auction and the index collapsed in moments
On expiry days, where the index finishes decides the profit and loss on derivatives. That makes last-moment orders unusually powerful
The rules of Korea's derivatives market were substantially changed after this — order limits per account and how expiry days are handled were both revised
It is a case of prices moving because of market structure rather than anything about the companies
The index recovered much of it the next day, because nothing had actually changed

Sources

KOSPI

Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.