The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

Questions raised over Deutsche’s Korea trade

Was 3% fall triggered by prop or client trade?; concerns raised about programme trading.

fall in Kospi triggered by W1.6 trillion of sales by local Deutsche unit

fall in Kospi triggered by W1.6 trillion of sales by local Deutsche unit 



An investigation into a market plunge on the Korea Exchange in November has put Deutsche Securities under the spotlight and triggered changes to Korean derivatives market practice. Deutsche will probably find out by March what, if anything, it’s been found guilty of and what the outcome will be.

On November 11, the Seoul market fell steeply in the last half hour of trade on the back of heavy foreign selling, much of it in programme trading, and specifically an arbitrage trade on an expiry date for options. Deutsche’s local securities unit made W1.6 trillion ($1.4 billion) of sales, bringing the Kospi index down 2.7%.

A market fall of less than 3% is not the end of the world but it prompted a great deal more scrutiny than might otherwise have been the case, for two reasons. One, the market movement was bad enough to bring one Korean asset manager, Wise Asset Management, unstuck; it has since folded.



You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree