Xetra IPO-Auction

Xetra IPO-Auction

Deutsche Börse Cash Market offers the Xetra IPO Auction service at the Xetra trading venue:

  • The Xetra IPO Auction enables efficient initial pricing after a new issue (initial public offering, IPO).
  • Involvement of the lead broker ensures that the price achieved in the IPO auction is of a high quality.
  • The Xetra IPO Auction is suitable for all sizes of new issues.

 

Trading venue: Xetra®

Trading time: 9.00 a.m. - 5.30 p.m.
The Xetra IPO Auction in a security can only be held once during the Xetra trading time. It takes place

  • at the beginning of trading as an opening auction in the case of securities which are continuously traded, and stocks which are traded in several auctions a day or
  • as an individual auction during the course of the day in the case of securities which are only traded in one auction a day.

Tradable instruments: Equities

 

How the service works

The Xetra IPO Auction trading service is based on the Auction trading model and differs in terms of procedure and transparency.
The IPO Auction begins with the outcry phase, in which market participants can enter orders and quotes as well as change or delete their own orders. The lead broker determines the end of the IPO phase.
With the end of the IPO phase the freeze phase begins. During the freeze phase the market participants can neither change nor delete their own or existing orders and quotes: The order book is inaccessible. Taking the order book situation into account, the lead broker determines the price spread. He sets the pricing time.
For securities traded in the trading model Continuous Trading, the IPO Auction is followed by a daytime auction. After the daytime auction, trading with Continuous Trading is continued.
For securities traded in another trading model, trading is continued in line with the trading model for the security.

Transparency

During the IPO outcry phase the order book is closed to participants. No information about the indicative auction price, the auction volume, or the best bid and/or offer limit is published. Only the market controllers and the lead broker have access to the order book.
At the latest five minutes after the start of the IPO Auction the market controllers publish the price spread agreed with the lead broker. The price is published via the Xetra Newsboard.

Price determination and order execution

  • Order prioritisation:
    In the IPO Auction all orders are initially collected in the order book on a price/time priority basis.
  • Price determination:
    The IPO Auction price is determined in accordance with the modified principle of highest volume transacted. The price lies within the spread determined by the lead broker and entered by the market controllers. This gives the lead broker and the market participants the certainty that there will be no unwanted fluctuations in price when the first price is determined.
  • Order execution:
    On account of the orders being sorted on a price/time priority basis, orders with a higher purchase or a lower sale limit are given priority when it comes to execution. Market Orders are given priority over Limit Orders. In the case of several orders with the same price limit, the order with the higher time priority is executed first.
    The price/time priority rules ensure that a maximum of one order limited to the auction price, or unlimited, is executed in part.
 

Market Status

XETR

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Xetra newsboard

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