Always-on won: dealers fret about risks in landmark shift to 24-hour trading

The shift means onshore spot won will trade alongside offshore NDFs round the clock. During Asian night hours, liquidity will be thinner. Dealers said that could widen bid-ask spreads and increase the risk of large gaps at the open after news events.

The simple read is that more trading hours mean more liquidity. The better read, dealers said, is that the distribution of that liquidity matters. While volumes may rise overall, the risk management challenge comes in the four hour overlap when U.S. data crosses a thin offshore market. One Seoul based trader said that period has historically produced the largest intraday swings in the won.

Namkoong said the biggest change is in how traders hedge overnight positions. Under the current system, they can close out before the onshore market shuts. With 24 hour trading, positions must be managed continuously. That requires more staff and better real time risk systems, he said.

The Bank of Korea and the finance ministry have not commented on operational details since the initial announcement. Dealers said they expect guidance on margin requirements and settlement timelines within two weeks.

The first major test comes after the U.S. nonfarm payrolls report on the first Friday of the new regime. Won trading will be open when the data hits. Dealers said they are watching how the market handles that event.