explanation for volatiliy today8 Oct 2007 13:45
I was interested to learn, via IG markets, that the LSE is starting a new trading system to replace SEAQ on Monday. There is an overview here: http://www.londonstockexchange.com/en-gb/products/membershiptrading/tradingservices/setsqx.htm
On that page you will also find a downloadable brochure, with more detail, as well as a list of affected stocks.
The key point of interest, affecting all investors and not just traders, is that 4 auctions will be conducted each day for the ex-SEAQ stocks:
- An opening auction, completing around 8am
- A morning auction completing around 11am
- An afternoon auction completing around 3pm
- A closing auction, starting at 16:30
These auctions are in addition to conventional market maker quotes, offered continuously, as now.
Sharp price moves could occur around the times of these auctions. Those with level-2 data will get a deeper view (from an order book) of the supply/demand for a given ex-SEAQ stock, as they do now for SETS stocks.