Update : Jan. 04, 2010

As in 'How are closing auctions at the limit price processed? (Part 1)', let's assume that the limit price has been reached at the time of the closing auction, and that the itayose method is inapplicable because there are insufficient sell orders to meet the buy orders. As explained earlier, all market buy orders are regarded as limit orders at the limit price, and matches shares according to the distribution explained in 'How are closing auctions at the limit price processed? (Part 2)'.

As in 'How are closing auctions at the limit price processed? (Part 1)', let's assume that the limit price has been reached at the time of the closing auction, and that the Itayose method is inapplicable because there are insufficient sell orders to meet the buy orders. As explained earlier, all market buy orders are regarded as limit orders at the limit price, and trading matches shares according to the distribution explained in 'How are closing auctions at the limit price processed? (Part 2)'.

- How are closing auctions at the limit price processed? (Part 1)
- How are closing auctions at the limit price processed? (Part 2)

Offers (sell) | Price | Bids (buy) |

3,800 (total of all offers) |
Market Order |
8,500 (Trading Participants A, B, and E) |

3,800 (total of all offers) |
500 S [limit price] |
9,300 (Trading Participants A, B, C & D) |

3,800 (total of all offers) |
499 | 5,200 |

3,800 (total of all offers) |
498 |

This means that there are now buy orders from 5 Trading Participants for 17,800 (8,500+9,300) shares at 500 yen. The orders are then broken down and arranged by Trading Participant in order of size.

Price | Bids | Breakdown of bids | Breakdown of bids | Breakdown of bids | Breakdown of bids | Breakdown of bids |

500 | 17,800 | 6,500 | 4,900 | 3,500 | 2,500 | 400 |

A | B | C | D | E |

As explained in 'How are closing auctions at the limit price processed? (Part 2)', Trading Participants receive 1 trading unit in turn in descending order of order quantity.

A result of this distribution is as follow.

TP | A | B | C | D | E | Total |

Step 1 | 100 | 100 | 100 | 100 | 100 | 500 |

Step 2 | 100 | 100 | 100 | 100 | 100 | 500 |

Step3 | 100 | 100 | 100 | 100 | 100 | 500 |

Step 4 | 100 | 100 | 100 | 100 | 100 | 500 |

Step 5 | 100 | 100 | 100 | 100 | - | 400 |

... | ||||||

Step 9 | 100 | 100 | 0 | 0 | - | 200 |

Total | 900 | 900 | 800 | 800 | 400 | 3,800 |

Trading Participants then distribute these shares to their customers according to their own internal guidelines.