Similar to Archipelago's current Opening Auctions, the Closing Auction is a single-price Dutch auction that matches buy and sell orders at the price that maximizes the amount of tradable stock. ArcaEx will calculate and continually disseminate the indicative closing price, indicative closing volume, and the auction imbalance prior to the Closing Auction that will occur every trading day at 4 p.m. E.T. This information will be available on Archipelago's Web site and in the ArcaBook data feed.
"As public companies and investors seek greater market transparency, we believe the combination of our Opening Auctions and our Closing Auction further ArcaEx's reputation as an open and fair marketplace," said ArcaEx CEO Jerry Putnam. "The Closing Auction will bring increased clarity to the market close and will allow our clients to fully participate in the closing price discovery process."
Recently approved by the SEC, ArcaEx's Closing Auction will be introduced in early 2004. At that time, ArcaEx will be the only market center that runs a fully transparent, all-electronic closing auction in U.S. equities.
