All brokers/trading members can participate in an auction. Clearing corporation prepares a list of short securities and sends it across all brokers/trading members who participate in the trading session on the day of Auction and place orders. A broker can place the orders of his own or his clients’ orders. A Member who has failed to deliver the securities of a particular company on the pay-in day is not allowed to offer the same in auction.
The following are different auction participants.
Initiator: The trading member who initiates the Auction. The initiator can give quotes either for buy or for sell order.
Competitor: The auction participant who quotes the orders on the same side of the initiator i.e. if the initiator gives bid quotes (buy order) then competitor also gives bid quotes.
Solicitor: The trading member who quotes the orders on the other side of the initiator i.e. if the initiator gives bid quotes (buy order) then competitor gives offer quotes (sell order).
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Sathish Emmadi
Sathish Emmadi is a co-founder & editor at Lastbull.com. He is presently working in IT for one of the world’s top mutual fund companies. Handled multiple projects in BFSI (Banking,Financial Services and Insurance) domain. An Engineering Graduate from NITW.
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