HK Stock – Trading Mechanism

Hong Kong Stock – Trading Mechanism

There are 4 sessions* of trading hours for Hong Kong stocks exchange. Each sessions is constrained to specific order types. The trading hours applied to *MONDAY – FRIDAY (EXCEPT PUBLIC HOLIDAY)

Session Name

Trading Hours

Auction session (Pre-opening Session)

From 9:00 am to 9:30 am. The opening price of a security is reported shortly after 9:20 am.

Continuous trading session (Morning)

From 09:30 am to 12:00 pm.

Continuous trading session (Afternoon)

From  1:00 pm to 4:00 pm.

Closing Auction Session

From  4:00 pm to a random closing between 4:08 p.m. and 4:10 p.m.

Order Types for Pre-opening Session and Closing Auction Session

At-auction Order

An at-auction order is an order with no specified price and is entered into the OTP-C for execution at the final Indicative Equilibrium Price (IEP). It enjoys a higher order matching priority than an at-auction limit order and will be matched in time priority at the final IEP.

Any outstanding at-auction orders after the end of the Pre-opening Session will be cancelled before the commencement of the Continuous Trading Session.

At-auction Limit Order

An at-auction limit order is an order with a specified price. An at-auction limit order with a specified price at or more competitive than the final IEP (in case of buying, the specified price is equal to or higher than the final IEP, or in case of selling, the specified price is equal to or lower than the final IEP) may be matched at the final IEP subject to availability of eligible matching order on the opposite side. An at-auction limit order will be matched in price and time priority at the final IEP. No at-auction limit order will be matched at a price worse than the final IEP. If an IEP cannot be determined during the Closing Auction Session, the Reference Price will serve as the price for matching. The matching of applicable at-auction orders and at-auction limit orders will occur at the Reference Price instead and the matching mechanism will be same as matching at the IEP.

Any outstanding at-auction limit orders at the end of the Pre-opening Session will be carried forward to the Continuous Trading Session and treated as limit orders provided that the specified price of that at-auction limit order does not deviate 9 times or more from the nominal price. Such orders will be put in the price queue of the input price.

Order Types for Continuous Trading Session

Limit Order

A limit order will allow matching only at the specified price. The sell order input price cannot be made at a price below the best bid price, if available whereas the buy order input price cannot be made at a price above the best ask price, if available.

Any outstanding limit order will be put in the price queue of the input price.

Enhanced Limit Order

An enhanced limit order will allow matching of up to 10 price queues (i.e. the best price queue and up to the 10th queue at 9 spreads away) at a time provided that the traded price is not worse than the input price. The sell order input price cannot be made at a price of 10 spreads (or more) below the current bid price whereas the buy order input price cannot be made at a price of 10 spreads (or more) above the current ask price.

Any outstanding enhanced limit order will be treated as a limit order and put in the price queue of the input price.

Source: HKEx