Outside of trading hours, which transactions are allowed below the obligatory exchange limit?

Outside of trading hours, which transactions are allowed below the obligatory exchange limit?

• A. On-exchange, off-order-book transactions below the obligatory exchange limit
• B. Off-exchange only
• C. All trades above the limit
• D. No trades outside trading hours are allowed

Answer: (A)

The key idea is that there is a size threshold, the obligatory exchange limit, that determines what can be done outside regular trading hours without going through the full posted order book. When a trade is smaller than that limit, it is permitted to take place outside the normal session either as an on-exchange transaction (still within the exchange framework but not exposed in the standard order book) or as an off-order-book, negotiated trade. In other words, small, below-limit transactions can occur in either form during off-hours, offering flexibility for liquidity without lifting the full visibility and controls of the main order book. The other options don’t fit because they either constrain to only one type, require trades to be above the limit, or deny any after-hours activity.

The key idea is that there is a size threshold, the obligatory exchange limit, that determines what can be done outside regular trading hours without going through the full posted order book. When a trade is smaller than that limit, it is permitted to take place outside the normal session either as an on-exchange transaction (still within the exchange framework but not exposed in the standard order book) or as an off-order-book, negotiated trade. In other words, small, below-limit transactions can occur in either form during off-hours, offering flexibility for liquidity without lifting the full visibility and controls of the main order book. The other options don’t fit because they either constrain to only one type, require trades to be above the limit, or deny any after-hours activity.