A panoramic view of Seoul's financial district of Yeouido / Korea Times file

Nearly 90 percent of the futures market is dominated by foreign investors and institutional investors, as retail investors withdraw from the market, according to data, Monday.

The futures market is where buyers and sellers exchange assets at a specified future date and price.

Data released by Rep. Min Byung-duk of the main opposition Democratic Party of Korea (DPK) revealed that foreign investors accounted for 47.3 percent of all transactions in the futures market in August.

The data also showed institutional investors accounted for 40 percent of all transactions in the same month.

On the other hand, retail investors accounted for a 12.8 percent share.

“The combined share of 87.3 percent held by foreign and institutional investors is related to the ban on short selling,” the lawmaker said, referencing the ban that took effect in November 2023.

The ban was aimed at protecting retail investors from illegal short selling practiced by larger and organized investors.

The ban was originally set to last until June of this year but has been extended through March 2025.

The legislator explained that the ban prompted more offshore and institutional investors to turn to the futures market for hedging purposes.

Meanwhile, the options trading market was also dominated by foreign and institutional investors.

In August, foreign investors accounted for 55.2 percent of the market's share.

The number of trading contracts signed by institutional investors reached 30.38 million in August, up from 27.33 million in January.