Call Markets and Auction Markets
Call and auction markets are trading markets, where trades are carried out based on ask and bid prices. Auction markets are common markets where continuous trading of instruments is carried out by matching ask and bid prices. But call markets lack continuity and trading of instruments is carried out at pre-determined intervals (eg: at market opening, noon and market close) on ask and bid prices specified by the market.
Call markets aggregate ask and bid orders, determines ask and bid prices, and carries out all transactions at once so that the market is clear after the orders are filled. As all orders are executed at one time, call markets have increased liquidity and decreased transaction costs. Call markets exist where there is less trading volume, where only few equities available for trading and where there is lesser number of participants. Traders trading in call markets may have to wait long for get filled and this can increase the risk.
In auction market the prices are set based up on demand and supply; i.e. by buyers and sellers. The process is continuous and thus traders can get their orders filled in quick time. Many auction markets determine their opening and closing prices based on call market mechanism; all other trades are based on continuous mechanism.
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Call markets aggregate ask and bid orders, determines ask and bid prices, and carries out all transactions at once so that the market is clear after the orders are filled. As all orders are executed at one time, call markets have increased liquidity and decreased transaction costs. Call markets exist where there is less trading volume, where only few equities available for trading and where there is lesser number of participants. Traders trading in call markets may have to wait long for get filled and this can increase the risk.
In auction market the prices are set based up on demand and supply; i.e. by buyers and sellers. The process is continuous and thus traders can get their orders filled in quick time. Many auction markets determine their opening and closing prices based on call market mechanism; all other trades are based on continuous mechanism.
NobleTrading.com Offers Online Stock Trading, Online Options Trading
Online Futures Trading, Online Forex Trading
Worldwide Brokerage Service, Day Trading Brokerage
posted by NobleTrading at
8:43 AM
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