The KOSPI stock index in South Korea climbed by 0.65% after a new trade agreement with the United States. Following the announcement, Hyundai Motors saw its share price rise by 3%. Former President Trump’s announcement about the trade deal is expected to have a positive effect on the market. The agreement should bring benefits to both countries, so investors are keen to see what happens next.

Market Reactions to Trade Agreement

We remember the strong reactions of the KOSPI and Hyundai to the US trade deal announced in 2018. Now, in late July 2025, we await the second-quarter trade balance figures coming out next week. These numbers will likely shape market trends. If the data shows weaknesses, the market may react strongly to any new updates. The KOSPI is around 2,750, a level it has had difficulty surpassing for weeks. With low implied volatility, buying KOSPI 200 index call options for late August is a cost-effective way to prepare for a possible breakout. If the upcoming economic data is robust, we could see a significant upward movement, reminiscent of past patterns. Hyundai Motors is crucial since its success hinges on exports to the United States. Hyundai and Kia’s combined share of the U.S. electric vehicle market has reached nearly 11% as of mid-2025, making their earnings report vital. Traders might consider buying call options ahead of the report if they expect good news on exports. However, there are risks if the trade figures don’t meet expectations. The Korean volatility index, VKOSPI, is below 15, signaling a calm market, which makes protective put options inexpensive. A small investment in puts on an automotive-focused ETF can provide a budget-friendly hedge against a market drop.

Semiconductor Sector Watch

It’s also important to keep an eye on the semiconductor sector, especially SK Hynix, which recently announced plans to expand its facilities in the U.S. Any comments from either government regarding chip supply chains could lead to significant price changes. Watch for increased options trading in these stocks as an indicator of how large traders are positioning themselves. Create your live VT Markets account and start trading now.

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