New Stock Trading System Implemented at PSE – The Philippine Stock Exchange (PSE) has implemented last Monday, July 26, 2010 its new trading system with a new set of trading rules, as part of their commitment to enhance the trading experience and support systems for all investors, trading participants and PSE support groups.
According to Citiseconline.com, among the important changes to the Trading Rules that immediately affect trading activities under the new PSE system is the new trading schedule which will now include a Pre-Close period at 11:57 a.m. prior to the Run-off Period of 12 noon.
Under the NTS trading rules, closing prices will now be calculated during the Pre-Close Period which will be similar to pre-opening calculations of the opening price.
A Pre-close period (from 11:57-12:00) will be added similar to pre-open that will freeze matching for three minutes but allowing posting.
Cancellations and modifications to orders are only allowed from 11:57-11:58 thereafter only posting of new orders are allowed until 12:00.
Noon time will bring about a closing price that will match pre-close posted orders then continue trading at the closing price until 12:10.
Also under the new rules, the price of an order shall be within the Trading Limits for the trading day.
There are two limits implemented: Static and Dynamic Thresholds.
The Static Threshold used to be known as the Floor and Ceiling Prices where the upper Static Threshold is 50 percent above the Reference price (previous day’s closing price) while the lower Static Threshold shall be 50 percent below the reference price.
The Dynamic Price Threshold consists of the upper Dynamic price threshold which is the last traded price plus the last traded price multiplied by the dynamic tick, while the lower Dynamic price threshold is the last traded price minus the last traded price multiplied by the dynamic tick.
An order entered breaching above or below the Dynamic Threshold will cause the security to be Frozen by the PSE stopping all trades until the PSE reactivates the security with a new Dynamic Threshold.
Thus, if the last traded price for stock A is 5.00 pesos and it has a PSE defined dynamic tick of 0.05, then the upper dynamic price threshold is 5.25 while the lower dynamic price threshold is 4.75.
Meanwhile, Good-Till-Cancelled orders will now cover a period of seven calendar days instead of seven trading days.
The NTS will also introduce the new board lot and price fluctuation table for all stocks listed in the PSE as follows: