Stock Price Formulation

How are simultaneous orders allocated to Trading Participants?

Update : Aug. 29, 2003

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Answer :

As explained in 'What are simultaneous orders, and how are they distributed?' above, simultaneous orders are distributed among Trading Participants in proportion to each Trading Participant's aggregate orders. A specific example is given below.

1. Let's assume that Trading Participants A, B, C and D have placed a number of buy orders at 500 yen prior to the setting of the opening price. The aggregate total volume of these orders is 24,300 shares.

Price Total Breakdown of bids
500 24,300 500 400 1,500 700 100 900 2,000 200 ---
A B C C D A B D ---

2. TSE then totals each Trading Participant's orders and ranks them according to size.

Price Total Breakdown of bids
500 24,300 10,200 8,700 5,000 400
A B C D

3. As explained in 'How is order priority decided?' above shares are distributed to Trading Participants as follows:

Price Total TP A B C D Total
500 24,300 Shares 10,200 8,700 5,000 400 24,300
    step 1 100 100 100 100 400
    step 2 100 100 100 100 400
    step 3 100 100 100 100 400
    step 4 100 100 100 100 400
    step 5 100 100 100 - 300
             

To explain, in a step each Trading Participant gets 100 shares (or 1 trading unit). This step is repeated.

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