As the KOSPI index surpassed the 8000 mark for the first time last month, foreign investors have significantly increased their trading activity in the KOSPI 200 night futures market. The trading volume has expanded, with foreign investors rapidly flipping between net buying and selling, indicating a strengthened short-term directional betting amid the index's upward trend.
According to the Korea Exchange, foreign investors engaged in net buying and selling worth hundreds of billions of won daily in the KOSPI 200 night futures market in April. While some trading days saw transactions exceeding 300 billion won, the overall trading volume remained relatively limited.
However, the situation changed in May. The daily trading volume for foreign investors surged into the trillions of won, marking a notable presence in the night futures market. This shift coincided with the KOSPI's continued upward momentum and rising expectations for surpassing the 8000 mark.
Particularly since mid-May, the trading volume by foreign investors has increased further. On May 14, they recorded a net selling of 575.8 billion won, followed by net sales of 477.2 billion won and 437.5 billion won on the 6th and 8th, respectively. Conversely, on the 20th, they returned to net buying with 392.6 billion won, showcasing a substantial buying trend. Compared to April, the daily trading volume has expanded by several hundred billion won.
The speed of trading direction changes has also accelerated. In April, foreign investor trading patterns tended to persist for several days, but by late May, rapid shifts between net buying and selling on a daily basis became prominent.
For instance, on May 26, foreign investors recorded a net selling of 238.4 billion won, only to switch to a net buying of 233.9 billion won the next day. They then sold off 265.5 billion won on the 28th, before returning to net buying of 258.2 billion won on the 29th. This pattern of alternating buying and selling demonstrates their quick response to market changes.
An industry insider noted, "During the process of the KOSPI surpassing 8000, foreign investors have responded to both the expectations of index increases and the potential for short-term volatility through the night futures market. Even as the index level rises, the interplay between bullish bets and profit-taking is evident, with the night futures market serving as a barometer for foreign investors' short-term strategies."
* This article has been translated by AI.
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