The new product listing of the U.S. Dollar/Korean Won Futures tradable via the Eurex/KRX Link presents a great opportunity to discuss both the new products and the Korean market. We found the perfect interview partner in Jennifer Ahn, Head of Global Derivatives Team at Shinhan Investment Corp.
What are the current trends and development in the Korean derivatives market?
Despite lower volatility, I have always found the Korean derivative market to be highly efficient and transparent. With the rapid growth of the Korean stock market, foreign investors have also increased their participation. With the Eurex/KRX Link, market participants can react instantly to news that impact stock prices after regular Korean trading hours.
International institutional investors use KOSPI futures and options to build their portfolios in frontier and emerging markets. The Eurex/KRX Link provides investors an advantageous opportunity to diversify their portfolios and hedge their positions during the Korean after-hours. This benefits both the domestic and foreign investors.
Your clients are trading the Eurex KOSPI products via the Eurex/KRX Link. What makes these products attractive to your clients?
Eurex/KRX Link identifies external factors such as events that occurred in Korean after hours, allowing investors to respond to price movements in both derivative and the domestic stock market. Although Korean market participants are accustomed to the global market, they invariably favour investing in the domestic market. The Eurex/KRX Link is another option to invest in the Korean market at night.
With the listing of USD/KRW Futures at Eurex, we now have the first FX futures on the Eurex/KRX Link. What potential benefits do you see the new products will bring?
Because U.S. dollar futures exhibited the highest trading volume among the currency futures available on the Korea Exchange, Eurex USD/KRW futures will be used by both domestic and foreign investors to hedge their currency risk during night time. Traditionally, institutional investors were relatively less concentrated in the USD/KRW futures night session than in the KOSPI options and futures. However, with the launch of the new FX futures, I believe that this may capture international institutions' interest in the Korean derivative market.
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