On March 2, 2012, Borsa İstanbul introduced "closing session". Closing session is a special trading session operating with a single price, where the single price is calculated by transferring the unmatched orders (excluding quotation orders) entered in the main trading session, and accepting new orders in the trading system without matching in a pre-determined period of time, and determining the price level at which the highest trading volume (i.e., single price) may be achieved, and then all trades are realized at this price level.
Warrants, exchange traded funds, rights coupons, and default transactions are not traded in the closing session.
Phases of Closing Session:
- Order collection phase – (4 minutes, 18:01 – 18:05)
- Price determination & closing session transactions phase – (2 minutes, 18:05–18:07)
- Trades at closing price/ single price phase – (2 minutes, 18:08 – 18:10)
Order Collection Phase (18:01 – 18:05) : This is the phase when new bid and ask orders, in addition to the pending orders for the securities traded with continuous auction and continuous auction via market making methods, are entered into the trading system in order to determine the price for the closing session. During this phase, orders are not matched.
During this 4-minute period, orders are collected for the closing session, while orders that have been already sent may be modified, split, or cancelled in accordance with the current regulations.
- Limit order, market order, market to the limit, FaK orders, Imbalance orders can be entered.
- Quotation orders can be entered, amended, canceled.
- Quantity and price of orders can be amended, the duration periods of the orders can be changed.
- Orders can be canceled.
- Trade reports cannot be entered.
- Short sell orders can be entered.
- The equilibrium (theoretical matching) price and equilibrium quantity and quantity of orders not executed at the equilibrium price will be broadcasted.
Closing Price Determination and Closing Session Transactions Phase (18:05 – 18:07): At this phase, the closing price is determined for the equities for which orders have been collected during the closing session, and following that, trades at closing price are realized. Orders transferred from the continuous auction phase, the limit price orders sent to the trading system during the order collection phase of the closing session, and MoCs match at the determined closing session price. The determined closing session price is the closing price for the relevant equity.
No new orders are allowed at this phase, while the pending orders may not be modified, split, or cancelled. Realized trades and the closing session prices may be monitored on both brokers’ and data vendors’ screens.
Trades at Closing Price Phase (18:08 – 18:10): This is the final phase where new bid and ask orders priced only with the closing price determined during the closing session can be entered to the trading system and can be matched with the pending orders at closing price that have not been executed during the closing session and transferred to this phase, or with those orders entered during this phase, in accordance with the priority rules.
During this 2-minute phase, orders may be entered only for the securities that have been traded in the closing session. New bid and ask orders to be entered in the trading system must be at the closing price and if matched with a pending order of the same price, are to be traded in accordance with the priority rules. Those that are not traded keeps pending in the trading system in accordance with the priority rules.
The orders entered at this phase may not be split or modified in terms of price, but their quantities may be increased / decreased or they may be cancelled.
Price Limits at the Closing Session
- Trades can made on the last trade price.
- Orders with limit prices are allowed (including FaK and Short Sell orders).
- Increase and decrease of quantities of the orders with the last trade price can be made.
- Quantity of orders waiting at a different price other than the last price can not be increased, but decreased.
- The prices can only be improved to the last trade price, no price amendment can be made apart from that.
- The information of order and price depth is continued to be broadcasted.
- Trade reporting can be made.
- The orders will be matched according to continuous trading method at the last trade price.
- Quotation orders can be entered, amended, canceled.
- The orders can be canceled.
At the closing session, order price of a capital market instrument (hereafter instrument) cannot differ by more than ± 3% of last traded price (last transaction price before the closing session) of the instrument . In the closing session, upper and lower price limits of the instrument are determined by applying 3% margins to the last transaction price. If the calculated upside and downside price limits do not fit to the price tick of the instrument, calculated limits are adjusted according to the price tick (calculated upper price limit is rounded to the nearest downside price tick and calculated lower price limit is rounded to the nearest upside price tick). In the closing session of shares traded with free margin (which do not have price limits), a margin of ± 3% margin is applied to the last traded price to set the limits for the closing auction.
Although a margin of ± 3% is applied for the closing session, order entry at a price outside the daily price limits of ± 20% is not allowed in the closing session. Daily price limits for an instrument is determined by applying ± 20% on the base price. Assume that the base price of an instrument for a specific day is 3.00 TL, thus lower and upper price limits of the instrument is 2.40 TL – 3.60 TL respectively. Additionally, assume that the last traded price of the instrument before the closing session is 3.58. In that case, considering the 3% margin rule, it is possible for an order to be entered at a minimum price of 3.48 TL and a maximum price of 3.60 TL (Note that daily lower or upper price limit cannot be exceeded in any case). In the instruments where a margin other than ±20% is applied on the base price, daily price limits valid for those instruments are taken into consideration.
Outstanding orders entered in the main trading session are transferred to the closing session. Among these orders, if there are buy orders at a price higher than the upper limit of the closing session and sell orders at a price lower than the lower limit of the closing session then ± 3% margin is not applied for calculating the closing session limits. In that case, only daily price band (± 20%) is valid in the closing session. For instance; if last traded price of an instrument in the main session is 4.00 TL. Lower and upper price limits for this instrument in the closing session is 3.88 TL and 4.12 TL, respectively. Among those orders transferred to the closing session, if there are buy orders at a price higher than 4.12 TL or sell orders at a price lower than 3.88 TL, then no margins are applied for the closing session only 20% daily price limit will be valid.