Korean stock market glossary
54 terms from valuation metrics to Korean disclosure and trading rules, each with what to watch for.
Market basics
- KOSPIKorea's main stock market board and the benchmark index that tracks all companies listed on it.
- KOSDAQKorea Exchange's growth market, home to many biotech, IT, chip-equipment and battery-materials companies.
- Market capitalizationShare price multiplied by shares outstanding — the price the market puts on a whole company.
- Daily price limitKorean stocks can move at most ±30% from the previous close in a single trading day.
- Tick sizeThe smallest price step for orders on the Korea Exchange, from KRW 1 to KRW 1,000 depending on price.
- Trading hours and call auctionsThe KRX regular session runs 09:00–15:30 KST, with call auctions at the open and the close.
- After-hours tradingTrading outside the KRX regular session at the closing price or at single auction prices.
- Settlement (T+2)Korean stock trades settle two business days after the trade date.
Valuation metrics
- P/E ratioShare price divided by earnings per share — how expensive a stock is relative to its profit.
- P/B ratioShare price divided by book value per share; below 1x means trading under accounting net assets.
- ROEHow much profit a company earns on shareholders' equity in a year.
- EPSNet income divided by shares outstanding — the profit attributable to one share.
- BPSNet assets divided by shares outstanding — the accounting value behind one share.
- Dividend yieldAnnual dividend per share divided by the share price — the cash return from dividends.
- Payout ratio (배당성향)The share of a year's net profit that a company pays out as cash dividends.
- EV/EBITDAEnterprise value divided by EBITDA — how the whole company's price compares with its operating cash generation.
- Operating marginOperating profit as a share of revenue — what the core business keeps from each sale.
Disclosures & corporate actions
- Rights offeringA company issues new shares for cash to raise capital (유상증자).
- Bonus issueNew shares handed to existing shareholders for free by moving retained surplus into capital (무상증자).
- Ex-rights dateThe day a stock trades without the right to new shares, when its base price is adjusted down.
- Ex-dividend dateThe first trading day on which buyers no longer receive the upcoming dividend.
- Stock splitDividing each share into several shares: more shares, lower price, same company value.
- Capital reductionReducing a company's share capital, usually by cutting the number of shares (감자).
- Share buyback and cancellationA company buying back its own shares, and cancelling them to reduce share count.
- Convertible bond (CB)A corporate bond that can be converted into new shares at a preset price after a set period.
- Bond with warrant (BW)A corporate bond with an attached warrant to buy new shares at a preset price.
- RefixingA clause that lowers the conversion or exercise price of CBs and BWs when the share price falls.
- Five percent ruleAnyone who acquires 5% or more of a listed company, or changes that stake by 1%+, must disclose it.
- Preliminary earningsA filing announcing estimated revenue, operating profit and net income before results are finalized.
- Earnings surprise and shockResults well above consensus are a surprise; results well below are a shock.
- IPO shares (공모주)Shares sold to the public when a private Korean company lists for the first time, allocated through subscriptions.
- Book-building (수요예측)Before pricing an IPO, underwriters collect the prices and quantities institutions are willing to buy at.
- Equal allocation (균등배정)At least half of the retail tranche in a Korean IPO is split equally among everyone who subscribes the minimum.
- Lock-up (의무보유확약·보호예수)A pledge or rule not to sell shares for a set period; supply can hit the market when it ends.
- Insider ownership report (임원·주요주주 소유 보고)A DART filing made when an officer or a 10%+ shareholder of a Korean listed company changes their shareholding.
- Third-party allotment (제3자배정 유상증자)A Korean rights issue in which new shares go to specific investors chosen by the company rather than to existing shareholders.
- Exchangeable bond (교환사채, EB)A corporate bond that can be exchanged for shares the issuer already owns, such as treasury stock or shares in another company.
- Reverse stock split (액면병합)Combining several shares into one, cutting the share count and raising the price per share without changing company value.
- Korea Value-up Program (기업 밸류업)A government and exchange initiative, launched in 2024, pushing Korean listed companies to raise shareholder returns and capital efficiency.
Trading rules
- Fails-to-deliver (FTD)Shares a seller did not deliver by the settlement date. The SEC publishes the figures by ticker twice a month.
- Short sellingSelling borrowed shares first and buying them back later, profiting if the price falls.
- Margin tradingBuying stocks with money borrowed from a broker, which magnifies both gains and losses.
- Forced liquidationA broker selling a client's shares without consent when a loan or unpaid purchase is not covered.
- Circuit breakerA rule that halts all trading when the market index plunges.
- SidecarA rule that suspends program trading orders for five minutes when futures prices swing sharply.
- Volatility interruption (VI)Switches a single stock to a two-minute call auction when its price jumps or plunges suddenly.
- Administrative issueA stock flagged by the exchange because it risks delisting due to weak results or capital impairment.
- Trading haltThe exchange temporarily blocks trading in a specific stock.
- DelistingRemoval of a stock from the exchange so it can no longer be traded on the market.
Investor jargon
- Foreign net buyingForeign investors buying more (by value) than they sell over a period.
- Program tradingLarge baskets of stocks bought or sold at once by computer programs.
- Featured stockKorean news articles flagging stocks with unusual price or volume moves and explaining why.
- Theme stocksGroups of stocks that move together because they are tied to the same issue or industry trend.
- Averaging downBuying more of a stock after it falls to lower your average purchase price.
Rules described reflect the Korea Exchange as of September 2026 and may change.