An order matching system or simply matching system is an electronic system that matches buy and sell orders for a stock market , commodity market or other financial exchanges . The order matching system is the core of all electronic exchanges and are used to execute orders from participants in the exchange.
23-608: Hong Kong Ferry (Holdings) Company Limited ( SEHK : 50 ) is a holding company in Hong Kong involved in property development , ferry , shipyard , travel and hotel operations. It operated franchised ferry services in Hong Kong until 2000, when its ferry licence was transferred to New World First Ferry . Its remaining marine businesses are dangerous goods vehicular ferry service, vessel chartering , floating restaurants and marine diesel oil trading. The company
46-483: A central system that belongs to the exchange. The algorithm that is used to match orders varies from system to system and often involves rules around best execution . The order matching system and implied order system or Implication engine is often part of a larger electronic trading system which will usually include a settlement system and a central securities depository that are accessed by electronic trading platforms . These services may or may not be provided by
69-577: A computer-assisted trading system on 2 April 1986. In 1993 the exchange launched the "Automatic Order Matching and Execution System" (AMS), which was replaced by the third generation system (AMS/3) in October 2000. David Webb , independent non-executive director of the Exchange since 2003, has been arguing for a super regulatory authority to assume that role as regulator, as there is an inherent conflict between its commercial and regulatory roles. In
92-401: A ninety-minute lunch break, and an afternoon session from 1:30 pm to 4:00 pm. Index futures and options now began trading at 9:15 am, thirty minutes earlier than before, and closed at the same time as before, 4:15 pm. On 5 March 2012, the lunch break was cut to sixty minutes, with the afternoon session running from 1:00 pm to 4:00 pm. The exchange first introduced
115-406: A pre-opening auction from 9:30 am to 9:50 am, followed by continuous trading from 10:00 am to 12:30 pm and 2:30 pm to 4:00 pm. The two-hour lunch break between the morning and afternoon sessions was the longest among the world's 20 major stock exchanges . A 2003 proposal to shorten the lunch break failed due to opposition from brokers. Another plan to shorten the lunch break to one hour was floated by
138-1124: A result, the Securities and Futures Commission (SFC) was set up in 1989 as the single statutory securities market regulator. The market infrastructure was much improved with the introduction by the exchange of the Central Clearing and Settlement System (CCASS) in June 1992 and the Automatic Order Matching and Execution System (AMS) in November 1993. Since then, the framework of market rules and regulations, both exchange-administered or otherwise, have been undergoing continuing review and revision to meet changing market needs while ensuring effective market regulation. The Exchange Listing Rules have been made more comprehensive, and other existing regulations have been improved or new regulations introduced to enhance market development and investor protection. Enhancements were also made to
161-548: Is a stock exchange based in Hong Kong . It is one of the largest stock exchanges in Asia and the 9th largest globally by market capitalization as of August 2024. The exchange plays a crucial role in connecting international investors with mainland Chinese companies, serving as a major platform for capital raising. Unlike mainland Chinese exchanges , it operates under Hong Kong’s distinct regulatory framework, which allows greater access to foreign investors. The stock exchange
184-401: Is owned (through its subsidiary Stock Exchange of Hong Kong Limited ) by Hong Kong Exchanges and Clearing Limited (HKEX), a holding company that it also lists ( SEHK : 388 ) and that in 2021 became the world's largest bourse operator in terms of market capitalization , surpassing Chicago-based CME . A 2021 poll reported that approximately 57% of Hong Kong adults had money invested in
207-533: The exchange also implemented a closing auction session to run from 4:00 pm to 4:10 pm, with a similar pricing mechanism as the opening auction; however, this resulted in significant fluctuations in the closing prices of stocks and suspicions of market manipulation . Initially, the exchange proposed limiting price fluctuations in the auction sessions to 2%; in the end, they removed the closing session entirely in March 2009. Up until 2011, trading hours comprised
230-495: The exchange in 2010; the morning session would then start earlier, run from 9:30 am to 12:00 pm, and the afternoon session from 1:00 pm to 4:00 pm, leaving the closing time the same as before. Justifications included bringing hours into line with China. Reactions from both brokers and the restaurant industry were mixed. On 7 March 2011, the exchange extended its hours in the first of two phases. The morning session now ran from 9:30 am to 12:00 noon, followed by
253-439: The formation of a unified stock exchange. The Stock Exchange of Hong Kong Limited was incorporated in 1980 and trading on the exchange finally commenced on 2 April 1986. Since 1986, a number of major developments have taken place. The 1987 market crash revealed flaws in the market and led to calls for a complete reform of the Hong Kong securities industry. This led to significant regulatory changes and infrastructural developments. As
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#1732802545165276-631: The listing of the first China-incorporated enterprise (H share) in June 1993 ( Tsingtao Brewery ); and the introduction of regulated short selling in January 1994 and stock options in September 1995. Furthermore, the exchange introduced the Growth Enterprise Market (GEM) in November 1999 to provide fundraising opportunities for growth companies of all sizes from all industries, and to promote the development of technology industries in
299-479: The meantime, he argues for improved investor representation on the Hong Kong Stock Exchange. In 2007, the uproar by smaller local stockbrokers over the decision by board of directors to cut minimum trading spreads for equities and warrants trading at between 25 HK cents and HK$ 2 caused the new board to vote to reverse the decision. The reforms were to be implemented in the first quarter, but
322-409: The north coast of Tsing Yi , through its wholly owned subsidiary, The Hong Kong Shipyard Limited, incorporated in 1948. With a workforce of 140, the shipyard undertakes repair and maintenance of vessels, as well as shipbuilding, and can drydock up to ten vessels simultaneously. Hong Kong Stock Exchange The Stock Exchange of Hong Kong (香港交易所, SEHK , also known as Hong Kong Stock Exchange )
345-452: The organisation that provides the order matching system. The matching algorithms decide the efficiency and robustness of the order matching system. There are two states for a market: continuous trading where orders are matched immediately or auction where matching is done at fixed intervals. A common example when a matching system is used in auction state is at the market open when a number of orders have built up. Electronic order matching
368-560: The region. According to the reform plan announced in March 1999, the Exchange, the Hong Kong Futures Exchange and their clearinghouses merged into a new holding company, the Hong Kong Exchanges and Clearing Limited . source: HK Ex The trading day consists of: The closing price is reported as the median of five price snapshots taken from 3:59 to 4:00 pm every 15 seconds. In May 2008,
391-483: The stock market. The physical trading floor at Exchange Square was closed in October 2017. The Hong Kong securities market can be traced back to 1866, but the stock market was formally set up in 1891, when the Association of Stockbrokers in Hong Kong was established. It was renamed as The Hong Kong Stock Exchange in 1914. By 1972, Hong Kong had four stock exchanges in operation. There were subsequent calls for
414-457: The system infrastructure, including the launch of off-floor trading terminals in brokers' offices in January 1996. The third generation of the trading system, AMS/3, was launched in 2000. It provides enhanced functionality and a platform for a straight-through transaction process. In respect of market and product development, there is the listing of the first derivative warrant in February 1988,
437-494: The time, continuous trading is performed. The trading mechanism on electronic exchanges is an important component that has a great impact on the efficiency and liquidity of financial markets. The choice of matching algorithm is an important part of the trading mechanism. The most common matching algorithms are the Pro-Rata and Price/Time algorithms. Comparison of Price/Time and Pro-Rata Following are few basic remarks about
460-427: The two basic algorithms and their comparison. Large limit orders can be " front-run " by "penny jumping". For example, if a buy limit order for 100,000 shares for $ 1.00 is announced to the market, many traders may seek to buy for $ 1.01. If the market price increases after their purchases, they will get the full amount of the price increase. However, if the market price decreases, they will likely be able to sell to
483-547: Was formerly the Hongkong and Yaumati Ferry Company which was established in 1923. After it was acquired by Henderson Land Development and a corporate restructuring in 1989, the holding company was renamed Hong Kong Ferry (Holdings) Company Limited and Hongkong and Yaumati Ferry became the subsidiary of Hong Kong Ferry (Holdings). Its head office is in North Tsing Yi . The company operates Hong Kong Shipyard, on
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#1732802545165506-565: Was introduced in the early 1980s in the United States to supplement open outcry trading. For example the then Mid West Stock Exchange (now the Chicago Stock Exchange ) launched the "MAX system, becoming one of the first stock exchanges to provide fully automated order execution" in 1982. There are a variety of algorithms for auction trading, which is used before the market opens, on market close etc. However, most of
529-427: Was put back on the table following protests by brokers. Webb criticised the board for caving in to vested interests. Source: HKEX, in billions of Hong Kong dollars, Data updated on 14 February 2018 22°17′03″N 114°09′28″E / 22.28414°N 114.15768°E / 22.28414; 114.15768 Order matching system Orders are usually entered by members of an exchange and executed by
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