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KRX plans to lower the tick size for stocks priced less than 1,000 Won per share from current 5 Won to 1 Won starting from October 4, 2010.
At the present, the tick size of 5 Won is applied to the stocks priced less than 5,000 Won per share. It has been observed that this practice instigates the price volatility and leaves fewer choices for quotation price, which, in turn, causes the rise of transaction cost and hinders the fair price discovery. Therefore, to reduce bid-ask spread and market impact, KRX decided to introduce the tick size of 1 Won for the stocks priced less than 1,000 Won. With the introduction of new rule, we expect that the price volatility would be reduced and fair price discovery function would be improved, thus enhancing the market quality.
Current Tick Sizes
| (Unit: Korean Won) | ||
| Stock Price | In KOSPI Market | In KOSDAQ Market |
| P < 5,000 | 5 | 5 |
| 5,000 ≤ P < 10,000 | 10 | 10 |
| 10,000 ≤ P < 50,000 | 50 |
50 |
| 50,000 ≤ P < 100,000 | 100 | 100 |
| 100,000 ≤ P < 500,000 | 500 | |
| 500,000 ≤P | 1,000 | |
