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About Physical Auction Trade

Time:2016-05-30  Source:NCCE  Author:NCCE

Commodity purchase and sale auction trade can be divided into purchase bidding and sale bidding trade.

Purchase bidding trade: the principal is seller and the traders bid to purchase commodities from sellers.

Sale bidding trade: the principal is buyer and the traders bid to sale commodities to buyers.

 

(A) The trade subject matter is embodied in manner of electronic contract. A contract represents a specific trade subject matter and the contract elements generally includes: code, contract name, quantity, grade and quality, packing specifications, delivery place, delivery type, delivery term, over and short scope, starting price, etc.

(B) Trade subject matter price quotation unit and currency: subject to current period announcements.

(C) Trade will be divided into several rounds according to the quantities of current period entrusted subject matter to proceed. The quantities and trade sequences will be announced before trading day.

(D) The whole trading process includes offering and auction two phases:

1. Declaration rules:

When a trader intends to participate in the bidding of a subject matter, he can only make offer during the offering phase, otherwise, he will lose the bidding qualification. More than one traders can make offers for the same subject matter in the offering phase but one trader can only make one offer for one subject matter.

In purchase bidding trade, if the offer is lower than the starting price, the offer is invalid;

In sale bidding trade, if the offer is higher than the starting price, the offer is invalid.

Once the offering time is up, the trade system will display the highest purchase offer price or lowest sale offer price. And it will follow the principle of Price Priority and Time priority to access into the bidding phase.

2. Bidding rules:

Every time, the range of price alteration should be the smallest range of alteration or its integral multiple. The smallest range of price alteration will be published in the Trade Announcement and Notice of current period.

While making offers in purchase bid trading, traders can only bid on the basis of the current highest price of the subject matter, which means the offer should be higher than the current highest price;

While making offers in sale bid trading, traders can only bid on the basis of the current lowest price of the subject matter, which means the offer must be lower than the current lowest price.

When the bidding ends, the trade system will automatically make the highest or lowest price as the knock down price and display the result immediately. Once a deal was clinched, the trader and the entrusting party signed an e-contract with immediate effect. The both sides must fulfill it otherwise, they have to be responsible for breach of contract.

(E) Bid is time-lapse bid mode:

Time-lapse bid means to set time limit while bidding. Before the end of the time limit, if a trader makes a new offer, the system will automatically delay the time to the next time limit and re-clock until there is no new offer in that time limit and the bidding is over.

NCCE can make the time limits according to the actual requirement, even adopt a new biding mode and publish it before the trade starts.

 

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