RE: Positive News imminent11 Oct 2023 19:12
Many private investors don’t understand how uncrossing trades work. This means private investors often miss out on the best prices of the trading day. Furthermore, this lack of understanding costs them in terms of execution as we can use the uncrossing trade to work better prices.
This article will explain the uncrossing trade, how an uncrossing trade works, and how we can take part in the uncrossing trade.
What is an uncrossing trade?
An uncrossing trade is where buyers on the bid and sellers on the ask match together in a single trade at the end of an auction period. The uncrossing trade shows up with the trade code “UT” on the London Stock Exchange.
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How does an uncrossing trade work?
An uncrossing trade will occur at the end of an auction’s call period if there is a match between the prices of both the bid side of the market and the ask side. It is the closing price for the auction on the LSE.
For example, if there is a price where both the seller and buyer can be satisfied, then the auction will disclose an indicative uncrossing price.
The indicative uncrossing price shows the price where the auction will uncross if there are no further orders or modifications to existing orders on the order book.