# A New Alternative Trading Platform: “NextTrade”
## Alternative Trading Platform?
“NextTrade” is an alternative trading system (ATS) established by the Korea Financial Investment Association and securities companies. This initiative aims to introduce a competitive system to break the nearly 70-year monopoly of the Korea Exchange (KRX) and increase convenience for investors.
Initially, during the first two weeks of its launch, only ten stocks with relatively low volatility, such as Lotte Shopping, will be traded. This will gradually expand to include major stocks with large market capitalizations, aiming to handle about 800 such stocks by early April. Exchange-traded funds (ETFs) will require legal amendments for trading, which is anticipated to become possible by early next year.
From the launch until September, trading on NextTrade will only be available through 15 securities firms throughout the full trading hours, and volatility measures such as the price change limit (±30%) and circuit breakers will remain the same as those of the KRX.
## Extended Trading Hours
For general investors, the most noticeable change with the launch of NextTrade is the extended trading hours. NextTrade introduces pre-market and after-market trading sessions outside the regular trading hours. The pre-market session will run from 8:00 AM to 8:50 AM, and the after-market session will be available from 3:30 PM to 8:00 PM. This extends the existing total trading time from 6.5 hours to 12 hours, adding an extra 5.5 hours.
## Differentiated Trading Fees
For the transaction fees charged by exchanges to securities firms, NextTrade’s fees range from 0.00134% to 0.00182%, which is 20–40% cheaper than the KRX’s 0.0023%. Consequently, the fees applied to investors by securities firms will vary by exchange. For instance, Korea Investment & Securities charges approximately 0.014% for transactions on the KRX and 0.013% for those on NextTrade for standard accounts. For example, when trading stocks worth 1 million won, using NextTrade could save about 10 won compared to the KRX. However, the difference is minimal for small trades, as investors mainly use preferential accounts with lower fees, creating a difference of only about 5 won per million won traded.
## Investors Can Choose Their Exchange
Starting in March, investors can directly select the exchange to trade domestic stocks through systems like HTS (Home Trading System). They can choose from integrated, KRX, or NXT (NextTrade) on the order book. Investors can set criteria based on achieving the best execution or the lowest cost.
If an investor selects “integrated” and sets no separate criteria, the securities firm will fulfill the best execution obligation by executing the order in the investor’s best interest. For example, if Investor C wishes to buy one share of Samsung Electronics at 56,000 won, and the ask prices are 55,900 won on the KRX and 55,800 won on NextTrade, the investor would benefit from ordering on NextTrade, where the total cost (unit price x quantity + transaction cost) is lower.
For investors aiming for quick market orders, the system will now allocate orders to the exchange where execution can happen fastest. Previously, orders were solely directed to the KRX, but now services will “intelligently” provide the most advantageous outcome for the investor.