South Korean Exchange Triggers KOSPI Index Circuit Breaker, Halting Programmed Trading for 5 Minutes

July 28th, the South Korean exchange (KRX) triggered the Sidecar mechanism due to the fluctuation of the KOSPI index, pausing programmatic trading for about 5 minutes.

The Sidecar mechanism is mainly used to address rapid fluctuations in a short period of time and only restricts programmatic trading, while manual trading can still proceed as usual. Unlike the Circuit Breaker, the Sidecar mechanism does not halt the entire market but is more like a "speed bump" during market volatility.

In contrast, the Circuit Breaker is usually employed in extreme market conditions, where it halts all market trading to prevent panic-driven volatility from further escalating.