Closing auction session
Introduced by the HKEX on 25 July 2016, the closing auction session (CAS) extends trading by an extra 8-10 minutes for applicable and specified securities to meet the needs of some investors, such as index fund managers, to trade at the closing price.
Closing price - maximum number of orders traded at
Trading under the CAS is in the form of single price auction, at which buyers and sellers enter orders, and the orders are gathered and interacted in the trading system to come up with a price for the maximum number of orders to trade at, i.e. the closing price. Buy and sell orders will then be matched and traded at the closing price in sequence of their type, price and time priority.
- Applicable securities: Starting from 25 July, phase one of CAS covers the constituent stocks of the Hang Seng Composite LargeCap and MidCap index, AH shares and all ETFs. Subject to a review of the phase one introduction, securities covered under the CAS may be expanded to all equities and funds. Debt securities, warrants and callable bull/bear contracts are excluded.
- Price limit: Imposed during order input so that the closing price of the securities will be within +/- 5% from its reference price.
- Random closing: The CAS will be closed randomly during 16:08 to 16:10.
- Order type: Only accept at-auction orders and at-auction limit orders.
- Trading hours: After the launch, the trading period for the applicable securities will be extended between 8-10 minutes. For example, closing time will be postponed up to 16:10 from 16:00 for a full trading day. For derivative markets, the closing time for stock index futures and options, currencies futures and commodities futures, and the opening time of after-hours futures trading will also be changed.
To know more about the features and operation of the CAS, you may refer to the CAS section on the HKEX website.
The CAS price limit and random closing are designed to safeguard against price volatility of the applicable securities. However, the closing price can still deviate from its reference price by up to 5%, and affect the related derivative products.
Know more about the order types
- At-auction order: Orders without specified price. In the CAS, if matching is possible, at-auction orders will be matched and traded at the closing price. At-auction orders will be matched first.
- At-auction limit order: Orders with a specified price. In the CAS, buy orders with the specified price equal to or higher than the closing price, and sell orders with the specified price equal to or lower than the closing price, may be matched and traded at the closing price. However, an at-auction limit order will not be matched and traded if the closing price is worse than its specified price. The matching priority of at-auction limit orders is lower than at-auction orders.
- Limit order: Orders that can only be traded at the specified price, and are applicable only in the morning session, extended morning session and afternoon session. If available, the sell order price cannot be made at a price below the best bid price, whereas the buy order price cannot be made at a price above the best ask price.