If there are only market orders in the auction, what is the opening price?

If there are only market orders in the auction, what is the opening price?

• A. Reference price
• B. Last price
• C. Opening price
• D. Maximum executable trading volume

Answer: (A)

In an opening auction, a reference price serves as the anchor for price discovery. When only market orders are submitted, there are no limit orders to push the price away from a benchmark. The system thus uses the reference price to set the opening price, ensuring the start of trading is orderly and fair and that market orders can be executed at a sensible benchmark. The last price is simply the previous trade price and isn’t used to determine the new opening price in this scenario. And maximum executable trading volume is not a price—it's a measure of how much can be traded at a given price, not the opening price itself.

In an opening auction, a reference price serves as the anchor for price discovery. When only market orders are submitted, there are no limit orders to push the price away from a benchmark. The system thus uses the reference price to set the opening price, ensuring the start of trading is orderly and fair and that market orders can be executed at a sensible benchmark.

The last price is simply the previous trade price and isn’t used to determine the new opening price in this scenario. And maximum executable trading volume is not a price—it's a measure of how much can be traded at a given price, not the opening price itself.