A stock is a small piece of a company
A stock (share) is a small unit of ownership in a company. Buying shares makes you an owner of that part of the company: you can receivedividends when the company shares its profits and vote at shareholder meetings. The share price changes every day with the company’s results, expectations about its future and the mood of the whole market.
A company’s size is measured by its market capitalization (share price × shares outstanding), not by its share price. A company with a ₩10,000 share price can be bigger than one at ₩100,000 if it has many more shares.
Where and when stocks trade (Korea)
- Exchange: Korean stocks trade on the Korea Exchange’s KOSPI and KOSDAQ markets. You open a brokerage account and place orders through an app (MTS) or desktop program (HTS).
- Regular hours: weekdays 09:00–15:30. Before the open (08:30–09:00) and just before the close (15:20–15:30) there is a call auction that collects orders and fills them at one price. On the alternative exchange (Nextrade), opened in March 2025, some stocks can also be traded in the morning and evening.
- Daily price limit: a stock can move at most ±30% from the previous close (upper and lower limits).
- Settlement: money from a sale arrives as cash in your account two trading days later (T+2).
- Call auction: orders are collected and filled at one price (08:30–09:00, 15:20–15:30)
- Regular session: orders fill as they come in (09:00–15:20)
- After-hours: trade at the close or in batches every 10 minutes (15:40–18:00)
Placing an order: limit and market
The price is set where buyers’ bids meet sellers’ asks. The order book shows how many shares are waiting at each price, and the smallest price step you can order at (the tick size) depends on the price range.
Sell orders (asks)
Buy orders (bids)
| Order type | How it fills | Good to know |
|---|---|---|
| Limit | Only at your price or better | If the price never gets there, it waits unfilled |
| Market | Immediately at the prices available now | Thinly traded stocks can fill at a worse price than expected |
Orders that have not filled yet can be cancelled or changed.
Costs: fees and taxes
- Commission: paid to your broker when you buy and when you sell. Around 0.015% is common for online trading, but it varies by broker and promotion.
- Securities transaction tax: charged on the sale amount when you sell Korean stocks, even without a profit.
- Dividend tax: dividends arrive with tax already withheld.
The more often you trade, the more costs eat into returns. Check after-tax dividends with the dividend calculator.