±30% Price Limits: Sanghanga and Hahanga
Korean stocks can move at most 30% from the previous close each day; limit-up is called sanghanga and limit-down hahanga. The band is wider than in many markets, so daily swings can be big.
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Text version · Korea Stock Rules, lesson 2: “±30% Price Limits: Sanghanga and Hahanga”
Korean stocks can move at most 30% from the previous close each day; limit-up is called sanghanga and limit-down hahanga. The band is wider than in many markets, so daily swings can be big.
Up to 30% up or down each day
Since 2015 Korea's daily price limit has been ±30% of the previous close: hitting the cap is called sanghanga (limit-up) and hitting the floor hahanga (limit-down).
Sanghanga (limit-up): buy orders queue up
The price can't go any higher, so buyers can only queue at the limit-up price; every sell order that appears goes to whoever is first in line. At limit-down it's the other way round: you may not be able to sell at all.
A wide band means big daily swings
±30% is much wider than the ±10% in many markets: big news can be fully priced in on the same day, and a stock you hold can lose nearly a third in one day.
Key takeaways
- Since 2015 the daily price limit on Korean stocks has been ±30% of the previous close.
- Hitting the upper limit is called sanghanga (limit-up) and the lower limit hahanga (limit-down); at the upper limit, buy orders can only queue for sellers.
- Price limits only spread a big move over several days without changing the news's impact; two limit-up days in a row add up to about 69%.
Try it yourself
You can do these exercises in this lesson's interactive simulation:
- Keep the previous close at ₩48,350: what are today's limit-up and limit-down prices?
- Drag “News shock” to +50% and press ▶: how many days does the price take to reach fair value? Where does it close each day?
- Then set the shock to +20%: does it still hit limit-up? Why?
- Set the shock to −50%: how many days in a row of limit-down? Where does it close each day?
Quiz and explanations
- 1. Yesterday's close was ₩10,000. What's the highest the stock can go today?
- Answer: ₩13,000.Korean stocks have a ±30% price limit: 10,000 × 1.3 = ₩13,000.
- 2. What does “sanghanga” mean?
- Answer: Hitting the upper limit for the day (limit-up).Sanghanga is limit-up; hahanga is limit-down.
- 3. A stock hits limit-up two days in a row. Roughly how much has it risen over the two days?
- Answer: 69%.Each day it rises 30% from the previous close: 1.3 × 1.3 = 1.69, about 69% over two days.
Terms in this lesson
- price limit (Price Limit): Some markets cap how far a stock can move in a day (±10% for most Chinese main-board stocks); hitting the cap is limit-up, hitting the floor is limit-down.