ELW
The ELW (Equity Linked Warrant) is a new type of securities whose return is connected to an underlying stocks or indices. Holders of the ELWs have the right to trade the underlying stocks or pay/receive cash in case of indices upon maturity according to pre-determined methods.

In principle, securities firms (issuers) determine the conditions of ELWs by taking into account the market or investor demand. Key conditions of ELWs that have a material impact on the ELW prices or investment decisions include underlying assets (stocks/stock price indices), type of rights (call/put), exercise price, maturity, exercise period (European-style/American-style), settlement method upon maturity (cash settlement/physical delivery), conversion ratio, etc.


Listing Requirements (Article 140 of the KOSPI Market Listing Regulation)
Listing Requirements
  Details
Issuer Requirement Investment Trading Business Permission An financial investment company that has been licensed to trade securities and OTC derivatives products.
Net Capital Ratio At least 150%
Underlying Asset Requirement
  • 50 stocks announced by the Exchange on a quarterly basis among the KOSPI200 index constituents and 5 stocks announced by the Exchange among the KOSDAQ150 index constituents on a monthly basis according to the method separately determined by the Exchange considering market capitalization, average daily trading value and so on.
  • KOSPI200, KOSDAQ150, Nikkei225, Hang Seng Index
    (Need to enter into a contract with a person who has the legal authority over the index)
Public Offering Distribution through public offering or secondary offering
Total Issuance Amount At least KRW 1 billion
Remaining Period for Right Exercise 3 months - 3 years
Liquidity Provision Submission of a liquidity provision plan by issuer or conclusion of contract with at least one company
Standardization Requirement (Guideline for ELW Listing Review)
Standardization Requirement
  Index ELW Stock ELW
Base Price Decision Closing price of the day that falls within 2 weeks prior to the application date for listing eligibility review Closing price of the last trading date in the week that comes right before the option expiration date right before the application date for listing eligibility review
Exercise Price Interval 2.5p (KOSPI200), 10.0p (KOSDAQ150) 11 intervals with 2%p parity each based on the base price of each month (90%, 92%, 94%, 96%, 98% 100%, 102%, 104%, 106%, 108%, 110% or over)
Conversion Ratio 100 (KOSPI200), 10 (KOSDAQ150) 0.001∼0.1 depends on base price of underlying stock
Parity 90% or over
Application Volatility Within 2 times of 60-days historical volatility
Remaining Period until Maturity 3 months -1 year
Last Trading Date Options expiration date of each month
Reported Spread 15%
Payment/Exercise Method Cash settlement/European style
Evaluation Price upon Maturity Closing value of the stock price index on the last trading day Arithmetic average price of the closing prices of the 5 trading days including the last trading day
Conversion Ratio by Base Price Range
Conversion Ratio by Base Price Range
Base Price(KRW) Conversion Ratio Base Price(KRW) Conversion Ratio
~10,000 0.1 100,000 ~ 200,000 0.005
10,000 ~ 20,000 0.05 200,000 ~ 500,000 0.002
20,000 ~ 50,000 0.02 Over 500,000 0.001
50,000 ~ 100,000 0.01    
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