What happens on the Johannesburg Stock Exchange

Fsp Invest, 26 Aug. 2013

Tags: johannesburg stock exchange, jse, shares, how the jse works, the functions of the jse

To buy and sell shares, you must go through the Johannesburg Stock Exchange (JSE). But have you ever given any thought to what exactly happens on the JSE? Read on to find out what happens on the JSE on a daily basis…

Let’s have a quick look at what happens on the JSE on a daily basis, Gareth Stokes explains in Fear, Greed and the Stock Market.

The JSE is very much like a fresh produce market. It opens – allows you a certain amount of time to barter for your goods and agree prices with the store owners – and then closes.

When it closes, it makes sure you receive all the goods you’ve bought, and the monies you owe paid over to the merchants who sold you the goods.

The JSE runs an automated trading system called JSE SETS (Sequence Equities Trading System). This system is an order-driven, central order book trading system with opening, closing and intra-day auctions.

The official trading hours of the JSE are 9am to 5pm.

The trading functions of the JSE

To summarise, the four main trading functions on the JSE are:

Function #1:
The JSE has to allow for the entry of orders into the order book and the display of the books either as agents (order-driven) or market makers (quote-driven).

Function #2
The JSE is responsible for holding a market opening period and closing call period.

Function #3:
During each day, the JSE must provide for an automated trading period, also known as continuous trading.

Function #4:
When required the JSE will also provide for:
  • An intra-day call period or volatility auction period,
  • The closing auction call period to determine the closing price of shares; and
  • An after-hours trading period to allow for the tying up of loose ends.

So there you have it, what happens on the JSE on a daily basis.

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