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12/01/2022

Types of stock exchange listings

Stocks and shares : the different types of stock exchange listing

Stock market securities, such as shares, are quoted daily. This quotation makes it possible to define the price of each security, and to regulate the game of supply and demand. But how is it calculated ? Here are the two quotation systems at work on the financial markets.

Continuous assisted quotation 

Most stock market securities are subject to continuous assisted quotation. This means that their price can change throughout a session, from 9:00 am to 5:30 pm for the Paris Stock Exchange. It also means that the price of these shares depends directly on the point of equilibrium between supply and demand: the calculation is carried out by a computer system, which makes it possible to receive and transmit information to all the companies and players concerned on all the major financial markets. The continuous quotation system applies to the main stock market indexes, such as the French CAC40 or the American Dow Jones.

However, some financial products are not subject to the logic of continuous quotation : these are shares that are less liquid, or for which the volume of trading is not considered sufficient. In this case, the method used is fixing.

Fixing : a specific calculation method for certain shares

Fixing prices are used to calculate the value of shares that do not have sufficient liquidity or buying and selling volume to be quoted continuously. Below a certain threshold, these securities are subject to a one-time quotation, which is generally calculated twice a day: an opening fixing at 7:15 am, and a closing fixing at 5:35 pm. This system makes it possible to integrate a large number of stock market orders into the calculation of quotes: instead of making the price of a share vary throughout the day, depending on each order, it takes into account all the orders placed since the last fixing to establish this price.

However, the type of quotation used for the calculation of a stock exchange value does not entail any specific consequence, nor any particular risk on the transactions made by the investors. The latter have to arbitrate their order book according to liquidity, less in the case of the fixing, and the volume of exchange of the shares.

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