Market Phase Qualifiers display the market model of cash market on Wiener Börse AG. For continuously traded listings trading takes place throughout the entire day and starts with the pre-trading phase followed by the main trading phase and ends with the post-trading phase. The trading system is not available in the time between the post-trading phase and the pre-trading phase.
The pre-trading phase precedes the main trading phase. During this time, market participants may enter orders and quotes in preparation of actual trading and change or delete their own orders or quotes. Market participants are not allowed to view the orders entered into the order book as the order book is closed during that phase. The only information shown, if available, is the closing price determined for the instrument concerned on the preceding trading day.
Main Trading Phase
During the main trading phase, orders of any size may be traded in accordance with the rules applicable to the type of trading and the trading segment concerned. In trading segments with liquid stocks (ATX market and specialist market) trading is continuous with an opening auction and a closing auction. Continuous trading on the ATX market and the specialist market is interrupted by intraday auctions.
In trading segments with less liquid securities (auction market, other regulated market and unregulated securities market) and in securities for which there are no market maker commitments, all trading is through auction trading only, with the number of auctions held during a trading day depending on the current liquidity of the instruments traded in the segment. In Vienna, only one auction is held per trading day in these segments.
The end of the main trading phase is followed by a post-trading phase, in which participants may enter orders and change or delete their own orders that have not been executed. Newly entered orders will be traded in the appropriate trading procedures on the next trading day, subject to any execution or validity restrictions that may apply. The processing of trades closed during the day also takes place during the post-trading phase.
Each auction consists of the call phase, price determination phase and order book balancing phase. The market phase qualifier indicates the particular phase of the auction except the price determination phase which takes only a few seconds.
The opening auction starts with the call phase. The market participants may enter new orders and quotes and change or delete previously placed orders. In the call phase, when the order book is open, the entire depth of the market is displayed. In order to avoid price manipulation, the call phase is ended at a random point in time after a certain minimum period.
Price Determination Phase
The call phase is followed by the price determination phase. Price determination takes only a few seconds. The auction price is determined on the basis of the order book situation at the end of the call phase according to the principle of executing as many orders as possible.
Order Book Balancing Phase
If it is impossible to execute all executable orders in the price determination phase, these orders are offered to the market for a limited time, during the so-called order book balancing phase. An order book balancing phase occurs only if there is a surplus of orders. Orders are executed at the auction price previously determined. During the order book balancing phase, orders previously entered into the system can be neither changed nor deleted.
The market participants may absorb the surplus on offer either wholly or in part.
The order book balancing phase comprises two stages: in the first stage (Pre Order Book Balancing Phase) - during a pre-defined period - only market participants registered as market makers or specialists have access to the surplus in a specific security.
After the end of this period, the surplus is available to the entire market (Order Book Balancing Phase).
The German market model provides the possibilities of permanent auctions for listings. This is not used at Wiener Börse AG, but the key is "reserved".
The electronic securities trading system Xetra® includes among others an important safety mechanism – volatility interruption – which contributes significantly to the prevention of price jumps and helps to increase price continuity. In addition, this mechanism improves the probability of unlimited orders being executed.
Volatility Interruption During an Auction
A volatility interruption is triggered if the indicative auction price at the end of the auction call phase is outside the dynamic and/or static price corridors. The price corridor is set individually for each security and defines the maximum deviation – in absolute numbers and/or as a percentage – from the reference price of a security, both positive and negative (symmetrically on either side of the reference price). The reference price is the most recently determined price; in each price determination phase, it dynamically changes the location of the price corridor. Market participants are informed if a volatility interruption occurs during an auction.
A volatility interruption results in a limited prolongation of the call phase during which market participants can enter new orders and quotes, or modify or cancel orders that are already in the order book. After expiration of the prolongation period, the call phase also ends at a random point in time.
Volatility Interruption in Continuous Trading
A volatility interruption causes a change of trading procedures. Continuous trading is interrupted, and an auction begins. In the auction, only those orders which were intended for continuous trading are considered. The auction consists of the call and price determination phases. After a minimum period of duration, the call phase ends at a random point in time. Following the price determination, or, if it is not possible to determine a price, continuous trading is resumed after expiration of the auction time period.
In case of technical problems enforcing e.g. the restart of the trading system, trading is halted, orders are not cancelled.
Securities are suspended from trading when normal trading in the share is temporarily in danger or when it seems that suspension will protect the investor. This reflects the reaction to important corporate news, which usually is reported in the form of an ad-hoc announcement. All orders in the orderbook are deleted.
The threat of a company’s imminent insolvency is considered such a circumstance. So are significant changes in the company’s profitability and a pending capital increase, etc. Halting a share’s trading is supposed to give all investors a chance to digest facts that are important for determining the value of a company.
Also the type of security can require trade suspension, e.g. at "knock-out" of certificates.