Closing Auction Conundrum

[striker]

This is an often raised subject and frankly I have never fully understood the explanations offered, including that of our own Simon from OST. These auctions seem to be the preserve of the priveledged few. Not really sure who qualifies to participate, but it does seem like the big traders (like Unit Trust Managers, EFT Managers & Stock Brokers, much like an "Old Boys Club". Looking at Billitons last trade today, some R150m changed hands at below the price that ordinary investors like all of us were trading. Are these trades conducted between fund managers, because it is doubtfull if that many shares were available in the open market. Seems to me like there are more questions than answers concerning this auction, and price manipulation does appear to take place. Surely the JSE, who do a fine job of running the exchange, should play open cards and fully explain this activity, in the interests of transparency and level playing fields. Is anybody else with me on this one?

[striker]

Looking at CZA the last trade at 1700hrs.though small was done at R1.00 below the going price before the auction!!!!How can this be ???? Would'nt all of us like to be invited to this exclusive private party and feast ??????

[Rogue]

jijijij

[Rogue]

OOps sorry...Yeah striker i am totaly with you on this one.And the auction was supposedly put there to stop price manupilation.

[#5]

why are the few allowed in the auction may be the competition board should hear about this this has also\ irked me

[SimonPB]

anybody can take part in the auctions. Just submit your bid/offer. Then the price at which largest volume will trade is the final trade price at the end of the auction period.

[#7]

And a bid to purchase "At Market"? Is it guaranteed to go through?

[SimonPB]

no, depends on quantity on the other side.

[#9]

It would be nice if we could see the prices at which the stock was bought and sold at the auctions. Instead there is a single number for all the stock traded at the close. Even although this value sometimes makes up more than half of the stock traded in a day.

[SimonPB]

up, all stock in the auction is bought/sold at the final price (5pm price for the closing auction), in other words there is only one price. So one can see it.

[#11]

ok , thanks ..

[#12]

Arent those trades that appear after 5pm those which have indeed occurred during the course of the day,.. hence they are often rather large in volume,..

[striker]

Simon - IT is apparent that volume size dictates at this auction, thereby excluding any small trader from the process. Surely this would then prevent the principle of an efficient market mechanism from operating. All of the small traders buying and selling during normal trading hours is negated by the heavyweights at the closing auction. This is surely not a level playing field for all participants in the game and price manipulation is most certainly taking place, which none of us can do much about.

[SimonPB]

the final trade is doen at max volume, but it adds up all the different orders. So your small trade could be bundled with a large trade from somebody else. Bottom line is that the auction process is way better then the previous system and it does not work against small traders (or work in favour of large traders).

[#15]

Enough already. The closing auction works beautifully. There is absolutely nothing wrong with it. If you don't fully understand something, don't criticise it.
If I can get a SINGLE contract bought or sold in the closing auction then I'm sure you can do it too. Get your prices right and you can also partake in the auction. And if you put in about 2seconds of work on a hand-held calculator, you will a pretty good idea of the closing price a few minutes before it happens

[bulletjie_1]

OOOOEEEHHH, agro, agro...

[#17]

Exactly,.. Price is easily calculable,.. How can fellas, esp small time fellas start complaining about manipulation this an manipulation that,.. Esp, ewhen they're still battling to grasp the concept in it's entirity,.. Well said,..

[#18]

hehe. Lucky I'm not obliged to keep my cool like Simon is. THAT's a job I'd keep for about 2hrs before they fire me . . .

[#19]

hehe. Lucky I'm not obliged to keep my cool like Simon is. THAT's a job I'd keep for about 2hrs before they fire me . . .

[#20]

Now if there was something they could do about these FRKKIN MULTIPLE POSTS!!!
:)