Shares of South Korean Chipmaker Crash on the Pre-Market for the Second Time This Week

Shares of South Korean semiconductor manufacturer SK Hynix temporarily crashed by 30% during pre-market trading on the alternative exchange Nextrade on August 6, marking the second such incident in roughly one week.

At 8:00 a.m. local time, a trade of just 11 shares was executed at 1.168 million won per share. Quotes immediately hit the daily lower limit, but by the end of the 50-minute pre-market session, losses had narrowed to about 2%.

During the main trading session on the Korea Exchange, SK Hynix shares closed down 10%. The decline occurred amid a broader souring of sentiment in the tech sector following losses in the U.S. stock market.

A similar glitch occurred last Tuesday, when the company's shares also briefly fell by 30% in the pre-market. As a result, nearly $60 million in long positions were liquidated within two minutes in a cryptocurrency derivative linked to SK Hynix shares.

This time, the knock-on effects on the crypto market were significantly smaller. According to data from analytics firm Allium, liquidations of contracts on the Hyperliquid platform amounted to approximately $230,000.

Nextrade explained that it uses a single price source and conducts continuous trading, since an alternative exchange prioritizes trade execution over setting the opening or closing market price.

Starting September 14, the platform plans to introduce a mechanism to halt sharp price swings. If orders deviate by at least 10% from the previous closing price, the exchange will conduct a two-minute auction to determine the price at which the highest volume of trades can be executed.

See also: Bloomberg