What is Auction Mode on International Exchange?
Auction Mode is a new mode of the International Exchange order book that brings price discovery auctions to the exchange. In Auction Mode, customers can submit limit orders but no matches will occur. Only limit orders with the “Allow Taker” flag will be accepted during Auction Mode.
What happens during auction mode?
Limit orders are collected over a minimum of 10 minutes for price discovery.
Upon completion of the auction, the exchange team will manually select an opening price based on the resting orders. Orders crossing the final opening price will be canceled and the book will move to full trading.
How does an auction work?
Auction mode has three phases before the order book returns to “full trading”:
Collection: This is the longest phase where the indicative price is established. Supported limit orders can be placed during this phase of the auction. Orders can be canceled and resubmitted during this phase.
Price Selection: After the “Collection” phase is complete, the exchange team will manually select an opening price based on the resting orders.
Completion: Crossed orders are canceled, the selected price is set as the opening price, and full trading begins.
What information is available while in auction mode?
The Coinbase Advanced product pages will make a note about the status of the order book and show the following new information:
A status message stating we are in auction mode
Indicative bid price and size, which is an indication of the best bid price and size following completion of the auction
Indicative ask price and size, which is an indication of the best ask price and size following completion of the auction
Note: Auction mode on International Exchange is slightly different from Coinbase Exchange Auction Mode. Coinbase Exchange Auction Mode will automatically match any crossed orders once the auction is complete. Additionally, the final opening price is set programmatically instead of manually.
When is a market usually in auction mode?
Auction mode may be used to launch new order books and to relaunch previously paused books.
How long will an auction last?
A minimum of 10 minutes or until a stable open price is established for low liquidity books.
What order types are supported during an auction?
Only limit orders are accepted in this auction. Limit orders marked with “post only” are not available during auction mode and will be rejected along with market orders.
What are the fees for participating in the auction?
For orders matched when the market opens, both sides are charged taker fees. Orders that remain on the book during full trading are charged the standard fees (maker or taker).
What are “crossed markets"?
A crossed market is when a market's bid price is higher than the ask price. While a book is in auction mode, the data feeds may show a crossed market.
This is consistent with the goals of the auction as it collects orders to aid in price discovery before continuous trading. After the auction is completed, the order book will no longer show a crossed market.