In the next space, we will learn what are the opening volatility and closing auctions in the Santiago Stock Exchange. In addition, we must take into account its schedule and some general rules of operation on the opening and closing auctions. There are three share auctions: opening auction, volatility auction and closing auction.
The operations of auctions are transactions of actions that are carried out through a computer system of negotiation in a set schedule. These schedules are established before, during or at the end of negotiations in the Telepregón.
These auctions are intended to establish a single price, which will serve as a reference for transactions made in the market later. There are three share auctions:
- At the beginning of the negotiations (Opening Auction)
- During the continuous trading hours (Volatility Auction)
- At the end of the trading hours (closing auction).
What is the opening auction of Santiago Stock Exchange? What’s your objective?
The opening auction on the Santiago Stock Exchange has as its main objective to establish a single price, called “Opening Price”. This opening price aims to serve as a reference for the next transactions that take place in the market, during that day.
In the opening auction on the Santiago Stock Exchange income from share, offerings will be between 9:00 am and 9:25 pm. While the fit of the offers and the registration of operations will take place between 9:23 and 9:25 hours. This schedule will be determined randomly by the system.
What is the volatility auction? What’s your objective?
The volatility auction on the Santiago Stock Exchange has as its main objective to establish a market price for the instruments that have been suspended, prior to trading in the Telepregón.
Therefore, all the shares that have been suspended from trading restart their transactions through a Volatility Auction.
The Volatility Auction of the Santiago Stock Exchange may be made at any time during the Telepregón trading hours with a duration of 5 minutes. In this period you can enter purchase and sale offers. On the other hand, the selection of offers and the registration of operations will be done randomly in the last 30 seconds of the Volatility Auction on the Santiago Stock Exchange.
What is the closing auction? What’s your objective?
The closing auction of the Santiago Stock Exchange has as its main objective to establish a closing price. Through a market mechanism that allows incorporating demand and aggregate supply into the formation of this closing price.
In the closing auction, the schedule, selection of offers and the registration of operations will be established and informed by the Stock Exchange before its entry into force.
General rules of operation of the opening and closing auctions
- In the schedule established for the auction operations, you can enter offers to buy and sell shares, indicating the quantity, price and mnemonic of the share. There is also the option to modify or cancel offers in this period.
- It must be borne in mind that the offers of purchase and sale entered in the auction will not be automatically covered before price compatibility. These matches will be made at the end of the auction schedule. And they will be made at a single price, the price that maximizes the number of shares traded, between the offers of purchase and sale compatible and that were in force at the time of matching. This will assign a single transaction price for all foreclosed transactions. As we have said, in the opening auction the price will be called “Opening Price” and in the closing auction it will be called “Closing price”.
- The offers in the Telepregón system that are valid at the beginning of the time of a certain auction will be included automatically in the negotiation mechanism.
- Brokers may carry out transactions on their own account in the opening, volatility and closing auctions, provided that they are authorized to operate under this modality.
- Opening, volatility and closing auction operations, as applicable, will have the same instructions that govern stock transactions.
- The operations carried out in the closing auction will set the closing price, at the single award value determined by the negotiation mechanism. This will be the case, provided that the sum of all the operations of the same instrument is equal to or greater than UF 20.
After learning what the opening, volatility and closing auction is, you are sure that you are interested in the Tools to operate in the Santiago Stock Exchange and the Types of stock market orders to operate in the stock market.