In a Market-by-Market (MMB) auction, what is the price outcome for a Market vs Market match?

In a Market-by-Market (MMB) auction, what is the price outcome for a Market vs Market match?

• A. Limit
• B. Arithmetic mean
• C. RP
• D. Market price

Answer: (D)

In a Market-by-Market auction, a match between two market orders is executed at the market price. Market orders seek immediate execution at the best available price, so there isn’t a specific limit or an average price to use. The engine crosses the orders at the price that is in effect in the market at that moment—the prevailing market price determined by the current bids and offers. The other options don’t fit because a market vs market match doesn’t set a limit, isn’t based on an arithmetic mean, and doesn’t use a separate reference price.

In a Market-by-Market auction, a match between two market orders is executed at the market price. Market orders seek immediate execution at the best available price, so there isn’t a specific limit or an average price to use. The engine crosses the orders at the price that is in effect in the market at that moment—the prevailing market price determined by the current bids and offers. The other options don’t fit because a market vs market match doesn’t set a limit, isn’t based on an arithmetic mean, and doesn’t use a separate reference price.