Update : Jan. 04, 2010
During auction trading, priority among orders is decided on two principles, price and time priority, to ensure that all orders are handled equally and that transactions proceed smoothly.
The following table illustrates how these two principles work together.
|Offer (sell)||Price||Bids (buy)|
|D1,000(3) E900(2) F500(1)||501|
|500||H8,000(1) B100(2) J400(3)|
|late early||early late|
Numerals - number of shares ordered
Numerals in brackets - order of priority
Alphabet - securities company identifier
Thus although there are sell orders at both 501 yen and 502 yen, those at 501 yen take precedence as a result of price priority. Of the three orders at 501 yen, Trading Participant F's order takes precedence, followed by Trading Participant E and then Trading Participant D, as a result of time priority. These are then followed by the orders at 502 yen, with Trading Participant C's order taking precedence over Trading Participant A's order.
Looking at the buy side, we can see that there are orders at 499 yen and 500 yen. In this case the orders at 500 yen take precedence due to price priority. Of the three orders at 500 yen, Trading Participant H's order takes precedence, followed by Trading Participant B and then Trading Participant J, as a result of time priority.
Thus each offer and bid is individually prioritised and executed accordingly.