Order Types and Processing

The rules governing the trading of all bonds remain unchanged since the introduction of Euronext’s Universal Trading Platform.

The most liquid securities are traded continuously throughout the day, while less liquid securities are traded at call auctions held twice daily, at 11.30 and 16.30 CET. Orders on the Marché Libre (Free Market) are matched once daily at 15.00 CET.

Whether securities are continuously traded or auctioned, issuers may call upon the services of a liquidity provider: a Euronext member who agrees to place a buy order and a sell order on the central order book with a minimum volume and a maximum bid/ask spread.

Market Architecture

The market architecture is based on four systems working in synergy:

  • Automatic order routing system: links customer orders to the central trading system via an order collector and a trader regardless of how the order is received.
  • Central trading system: executes orders automatically.
  • Real-time information posting system: provided by the trading system.
  • Clearing and settlement system: also uses information provided by the trading system.
  • Orders for a given security are automatically classified by direction (buy or sell) and price limit, with those at the same limit ranked chronologically in the order in which they are entered into the central order book.

Order Execution

Orders are executed in order of price:

  • Buy orders are executed in decreasing order
  • Sell orders are executed in increasing order
Limit Order - The buyer specifies a maximum price and the seller a minimum price
Market order
  • - No price limit
  • - Matches best prices until full execution

- After partial execution ranked at the top of order book without price

Market to Limit Order
  • - Entered during continuous phase without indication of price
  • - Becomes a limit order at the best offer if buy order, or at the best bid if sell order
Market on Opening Order
  • - Entered only in the pre-opening phase
  • - Executed at the opening price
  • - Becomes limit order at the opening price if partially executed in the opening auction
Stop Limit Order - Becomes limit order when trigger price is reached
Stop Loss Market Order - Becomes market order when trigger price is reached

 

Off-order Book

The Trade Confirmation System (TCS) enables Euronext to report trades executed off-order book. At the discretion of the participants, the clearing and settlement of such transactions can be handled automatically or manually. During trading hours, Euronext members can conclude off-order book transactions within Euronext regulated markets from the moment that the normal block amount is reached:

Type of Debt Instrument Normal Block Amount
Debt instrument traded continuously €250,000
Debt instrument traded by auction €100,000

 

Note: Outside of trading hours, all Euronext listed securities may be traded off-order book without taking into account the normal block amount.