What is an auction?
The Exchange purchases the requisite quantity in the Auction Market and gives them to the buying trading member.The shortages are met through auction process and the difference in price indicated in contract note and price received through auction is paid by member to the Exchange, which is then liable to be recovered from the client.
An auction is an event in which goods or property are sold to the highest bidder. By being open to the public, an auction ensures a wide range of bids, and sometimes items at auction can fetch surprisingly high prices. The bidders, in turn, create their own market, determining on an individual basis how much they want to pay for an item, rather than having prices dictated by the seller. There are a number of types of auctions performed around the world. In a basic so-called English auction, an item is introduced to the crowd and members of the public bid on it, slowly raising the price until everyone bows out, leaving a winner of the auction who pays the price he or she bid. The auction is managed by an auctioneer, someone who keeps an eye on the bidding and determines the ultimate winner. In some cases, the seller may set a minimum bid, ensuring that the item will not sell below a certain price. Famous auction houses like Sotheby’s specialize in this type of auction. In another type o
An auction is a mechanism utilised by the exchange to fulfil its obligation towards the buying trading members. Thus, in case for a settlement, the selling trading members have delivered short, their deliveries are bad or they have not rectified the company objection reported against them, the exchange purchases the requisite quantity from the market and gives them to the original buying member. Auctions are generally held on Wednesday/Thursday.
The Stock Exchange is rigorous in the enforcement of its settlement schedules in terms of timely receipt of funds and securities as well as in the handling of short and bad deliveries. All short deliveries and unrectified bad deliveries of shares are put up for auction on the pay-out day. This is to ensure that the buying member receives the securities on the pay-out day. The Stock Exchange purchases the requisite quantity from the auction market and delivers them to the buying Trading Member.
