Page 119 - DCOM507_STOCK_MARKET_OPERATIONS

Stock Market Operations

Notes encountered then an appropriate error message is displayed in the message window and
the focus is set on the AUC No. When the order details are found to be correct, the system
assigns a unique order number to the order and sends an order confirmation message to
the trader workstation. If the solicitor period for that auction is over, the order is not
accepted. Auction number for each security is displayed in the Auction Inquiry screen.
(ii) Validation of Auction Orders: Following validation checks are performed, in addition to
the routine order entry validation checks, to verify initiator orders:

(a) If the auction market is not open for trading, the user is not allowed to enter an
auction order.
(b) If a trading member or a participant is suspended, then no auctions can be entered
for the trading member or for the participant.
(c) If the security is not allowed to trade in the auction market or if the security is
suspended, the orders for that security are not allowed.
(d) If the quantity entered exceeds Warning Quantity Percentage, the system asks the
user for confirmation of the order.

(e) Any order with a price outside the Day Min/Max range is not allowed.
Following validation checks are performed to verify the competitor and the solicitor orders:
(a) If a competitor order is entered, then a check is made if the auction in which order entry is
desired is in the competitor period.
(b) If a solicitor order is entered, then a check is made if the auction in which order entry is
desired is either in competitor period or solicitor period.

(c) The Trading Member cannot enter order for a security in which initiator order is entered
against him.
(d) Auction order entry in auctions which are yet in a pending state or which are cancelled is
prohibited.

5.5.2 Auction Order Modification

The user is not allowed to modify any auction orders.

5.5.3 Auction Order Cancellation

The user can cancel any solicitor order placed by him in any auction provided the solicitor period
for that auction is not over. The order cancellation procedure is similar to that of normal market.
The user can also use quick order cancellation key to cancel his outstanding auction orders.

5.5.4 Auction Order Matching

When the solicitor period for an auction is over; auction order matching starts for that auction.
During this process, the system calculates the trading price for the auction based on the initiator
order and the orders entered during the competitor and the solicitor period. Currently, for
Exchange initiated auctions, the matching takes place at the respective solicitor order prices.

Example: Auction is held in XYZ for 5,000 shares. The closing price of XYZ on that day
was ` 155. The last traded price of XYZ on that day was ` 150. The price of XYZ last Friday was
` 151. The previous day’s close price of XYZ was ` 160. What is the maximum allowable price at

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