What is a Trading Round?
A Trading Round refers to a specific time period or phase during which securities are traded on an exchange. Within each trading round, market participants can submit orders, engage in buying and selling transactions, and access market prices and transaction information.
Different exchanges may have various trading round setups, aimed at managing market liquidity, maintaining order in transactions, and providing equitable trading opportunities.
What Types of Trading Rounds Are There?
Here are some common types of trading rounds:
Opening Auction: A period before the start of the trading day where market participants can submit orders and determine the opening price through an auction. This is the first trading round of the day, initiating trading activities.
Continuous Trading: Following the opening auction, the market enters the continuous trading phase. During this phase, market participants can submit orders at any time and conduct buying and selling transactions based on the supply and demand in the market. This is the most common trading round.
Closing Auction: A period before the end of the trading day where market participants can submit orders and determine the closing price through an auction. This is the last trading round of the day, set to determine the closing prices.
In addition to the basic trading rounds mentioned above, some exchanges may also have specific trading rounds like midday breaks or after-hours trading to accommodate different market needs and trading strategies.
The setup of trading rounds helps to regulate the trading process, offering fair trading opportunities to market participants, while also aiding in ensuring market liquidity and stability. Market participants need to be familiar with the trading round rules of their respective exchanges, and plan their trading activities according to the timing and restrictions of the trading rounds.
