auction market

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Auction Market

A security exchange in which buyers make bids and sellers make offers in order to make transactions in a security. On an auction market, the current price for a share in a security is the highest price a buyer is willing to pay and the lowest price a seller is willing to accept. For example, if potential buyers for Security A enter bids of $50, $51, and $52, and potential sellers enter offers of $52, $53, and $54, the current share price is $52. Only the bid/offer for $52 is executed; others must make better bids and offers in order to conduct transactions. The New York Stock Exchange is a major auction market.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

auction market

A market in which buyers and sellers gather to transact business through announced bid and ask prices. The organized securities exchanges are examples of auction markets. Compare dealer market, open outcry.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Auction market.

Auction market trading, sometimes known as open outcry, is the way the major exchanges, such as the New York Stock Exchange (NYSE) and the Chicago Mercantile Exchange (CME), have traditionally handled buying and selling.

Brokers acting for buyers compete against each other on the exchange floor, as brokers acting for sellers do, to get the best price. While the trading can be quite intense, it is orderly because the participants adhere to exchange rules.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
Satin and Weber report higher prices for risky prospects in first-price sealed-bid auctions and oral double-auction markets. In their experiment there was no selection and all subjects bid in all markets.
Sarin and Weber conducted double-auction markets and first-price sealed-bid auctions for risky and ambiguous Ellsberg urn prospects and consistently found lower prices for ambiguous prospects.
We also conducted two double-auction markets to check for LSE in this very competitive environment.
Cyclical double-auction markets with and without speculators.
Based on evidence from a wide variety of experimental double-auction markets, Vernon Smith [1982, 167] has expressed this more formally as the "Hayek Hypothesis":