Zaraba Method

Posted in Finance, Accounting and Economics Terms, Total Reads: 552
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Definition: Zaraba Method

It refers to a method of trading securities. Zaraba Method is also famously known as the continuous auction method. The method is a method of matching orders which is quite similar to the process of an auctioneering. The orders are systematized by both their prices and the age (time that they were taken).


Process Flow: As soon as any order for a particular stock is delivered, it is equated and matched with orders that are already present in the order book. When a bid comes in that equates with the price requested by another order, the two orders are performed and taken off the order book.


This method of trading securities is most commonly used in Japanese stock exchanges. The Zaraba method ensures that the exchanges can facilitate trading uninterrupted throughout the day, primarily on the Tokyo Stock Exchange.


Example:



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