In an auction, market orders are matched against market orders at what price?

In an auction, market orders are matched against market orders at what price?

• A. Market price
• B. Reference price
• C. Last traded price
• D. Mid price

Answer: (B)

In an auction, market orders are matched at a single, determined price called the reference price. This price is set by the auction rules to maximize the matched volume and balance supply and demand, so all executions during the auction occur at that same reference price. This ensures fair treatment of orders and clear price discovery for the opening or closing process. It differs from continuous trading, where trades occur at the evolving market price indicated by ongoing bids and offers, or from last traded or mid prices that apply in other contexts.

In an auction, market orders are matched at a single, determined price called the reference price. This price is set by the auction rules to maximize the matched volume and balance supply and demand, so all executions during the auction occur at that same reference price. This ensures fair treatment of orders and clear price discovery for the opening or closing process. It differs from continuous trading, where trades occur at the evolving market price indicated by ongoing bids and offers, or from last traded or mid prices that apply in other contexts.