Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

Korea Stock Exchange KOSPI 200 / Event-Driven

<ul>
<li>The street suspects NPS is fast-tracking its reference portfolio in local equities, not just rebalancing to cover last year’s underweight in its Q1 2025 adjustment.</li>
<li>The passive-to-active shift is on—starting with enhanced passive, then an early ramp into event-driven and high-conviction active plays.</li>
<li>We traders should expect outsized swings in leaders and restructuring plays as NPS flows amplify moves.</li>
</ul>


The street suspects NPS is fast-tracking its reference portfolio in local equities, not just rebalancing to cover last year’s underweight in its Q1 2025 adjustment.
The passive-to-active shift is on—starting with enhanced passive, then an early ramp into event-driven and high-conviction active plays.
We traders should expect outsized swings in leaders and restructuring plays as NPS flows amplify moves.


Digging Into the Early Full Rollout of NPS’s Reference Portfolio Play

Equity Derivatives and Volatility Specialist, Clifton Derivatives

John Ley

Equity Derivatives and Volatility Specialist

Clifton Derivatives

Independent derivative and volatility research firm focusing on events/catalysts, earnings, relative value and cross asset volatility strategies.

Equity Derivatives

Korea Stock Exchange KOSPI 200 / Equity Derivatives

<ul>
<li>Kospi takes a breather this week after last Friday’s sell-off to trade in a narrow range.</li>
<li>Short-Term volatility eases in trade shortened week pulling implied vol down.</li>
<li>We highlight the dynamic between implied and historic volatility and discuss whether long or short volatility strategies have been the most effective this year.</li>
</ul>


Kospi takes a breather this week after last Friday’s sell-off to trade in a narrow range.
Short-Term volatility eases in trade shortened week pulling implied vol down.
We highlight the dynamic between implied and historic volatility and discuss whether long or short volatility strategies have been the most effective this year.


Kospi Index Options Weekly (Mar 04 – 07): Market Stabilizes After Sharp Drop

Derivatives and Quantitative Strategist

Gaudenz Schneider

<ul>
<li>
US steel and aluminum tariffs (effective 12 March US time) will take effect on March 13 across the Asia-Pacific region. Volatility can be expected in Japan, South Korea, India, China.</li>
<li>Major quarterly derivatives expirations will occur on March 13 in Japan (Nikkei 225, TOPIX, Stocks), South Korea (KOSPI 200, KOSDAQ 150, Stocks), and India (BSE Stock Futures and Options).</li>
<li>Earnings announcements for <a href="https://www.smartkarma.com/entities/aia-group-ltd" target="_blank" data-smartkarma-citation="entities:14895:1" rel="noopener">AIA Group (1299 HK)</a> and <a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK/LI US)</a> are scheduled for March 14, while India's markets will be closed that day for the Holi holiday.</li>
</ul>



US steel and aluminum tariffs (effective 12 March US time) will take effect on March 13 across the Asia-Pacific region. Volatility can be expected in Japan, South Korea, India, China.
Major quarterly derivatives expirations will occur on March 13 in Japan (Nikkei 225, TOPIX, Stocks), South Korea (KOSPI 200, KOSDAQ 150, Stocks), and India (BSE Stock Futures and Options).
Earnings announcements for AIA Group (1299 HK) and Li Auto (2015 HK/LI US) are scheduled for March 14, while India's markets will be closed that day for the Holi holiday.


Equity Capital Markets

Korea Stock Exchange KOSPI 200 / Equity Capital Markets

<ul>
<li>With cautious foreign interest, DN Solutions' big IPO deal might skip the OC and go full local for bookbuilding, setting a new trend in Korean IPOs.</li>
<li>If foreign anchor orders drop, local players gain more negotiating power, leading to aggressive bidding and potentially a way more conservative IPO price.</li>
<li>Offshore funds passing investment review without an OC could grab more volume, benefiting from local-led down-pricing without lock-up restrictions.</li>
</ul>


With cautious foreign interest, DN Solutions' big IPO deal might skip the OC and go full local for bookbuilding, setting a new trend in Korean IPOs.
If foreign anchor orders drop, local players gain more negotiating power, leading to aggressive bidding and potentially a way more conservative IPO price.
Offshore funds passing investment review without an OC could grab more volume, benefiting from local-led down-pricing without lock-up restrictions.


DN Solutions IPO Might Skip OC—A Unique Trading Opportunity

<ul>
<li>This 40% rule will distort bookbuilding, force down-pricing, choke float post-listing, and amplify volatility.</li>
<li>Offshore investors like us benefit most—cheap IPO pricing with no lock-up. Local brokers see this as a giveaway to foreign funds and pushed back hard last Friday.</li>
<li>FSS won’t budge—40% lock-up is happening. If issues arise post-implementation, they might adjust later.</li>
</ul>


This 40% rule will distort bookbuilding, force down-pricing, choke float post-listing, and amplify volatility.
Offshore investors like us benefit most—cheap IPO pricing with no lock-up. Local brokers see this as a giveaway to foreign funds and pushed back hard last Friday.
FSS won’t budge—40% lock-up is happening. If issues arise post-implementation, they might adjust later.


Local Brokers Sound Off on 40% IPO Lock-Up—A Major Setup for Offshore Traders

South Korea

The KOSPI 200 Index is a capitalization-weighted index of 200 Korean stocks which make up 93% of the total market value of the Korea Stock Exchange. The index was developed with a base value of 100 as of January 3, 1990.

Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX EQUITY)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX EQUITY)

Digging Into the Early Full Rollout of NPS’s Reference Portfolio Play

This post dives into the early full rollout of NPS’s reference portfolio play, analyzing its implications, market impact, and what traders should...

Sanghyun Park

Kospi Index Options Weekly (Mar 04 – 07): Market Stabilizes After Sharp Drop

Kospi trades in narrow range after sell-off, short-term volatility eases and we debate the effectiveness of long vs short volatility strategies.

John Ley

The Week Ahead in Options - 10 March

US steel and aluminum tariffs to impact Asia-Pacific markets on March 13. Quarterly derivatives expirations in Japan, South Korea, and India....

Gaudenz Schneider

DN Solutions IPO Might Skip OC—A Unique Trading Opportunity

DN Solutions IPO (one of the biggest in Korea’s pipeline this year) is seriously considering moving forward without an OC—this could present a...

Sanghyun Park

Local Brokers Sound Off on 40% IPO Lock-Up—A Major Setup for Offshore Traders

Korea FSS meeting on the 40% IPO lock-up rule last Friday—local brokers flagged the key issue, but for offshore traders like us, this sets up a...

Sanghyun Park

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Digging Into the Early Full Rollout of NPS’s Reference Portfolio Play

This post dives into the early full rollout of NPS’s reference portfolio play, analyzing its implications, market impact, and what traders should...

Sanghyun Park

Kospi Index Options Weekly (Mar 04 – 07): Market Stabilizes After Sharp Drop

​Kospi trades in narrow range after sell-off, short-term volatility eases and we debate the effectiveness of long vs short volatility strategies.

John Ley

The Week Ahead in Options - 10 March

​US steel and aluminum tariffs to impact Asia-Pacific markets on March 13. Quarterly derivatives expirations in Japan, South Korea, and India....

Gaudenz Schneider

DN Solutions IPO Might Skip OC—A Unique Trading Opportunity

DN Solutions IPO (one of the biggest in Korea’s pipeline this year) is seriously considering moving forward without an OC—this could present a...

Sanghyun Park

Local Brokers Sound Off on 40% IPO Lock-Up—A Major Setup for Offshore Traders

Korea FSS meeting on the 40% IPO lock-up rule last Friday—local brokers flagged the key issue, but for offshore traders like us, this sets up a...

Sanghyun Park

Kospi trades in narrow range after sell-off, short-term volatility eases and we debate the effectiveness of long vs short volatility strategies.

US steel and aluminum tariffs to impact Asia-Pacific markets on March 13. Quarterly derivatives expirations in Japan, South Korea, and India....