DEFINITION of 'Itayose'

A clearing method used by Japanese commodity exchanges to set prices. It is a form of auction market in which the time of order entry is not distinguished, and an opening price is derived on the principle of price priority requiring that the following occurs:

1. All market orders are executed first.
2. Next, all limit orders are executed to sell/buy at prices lower/higher than the execution price.
3. Finally, the following amounts of limit orders to sell or buy are at the execution price:
- the entire amount of all either sell or buy orders, and
- at least one trading unit from the opposite side of the order book.


This is a modified version of the Walrasian market. Staff at exchanges that implement the itayose method will post a provisional price to floor members. These members then submit buy and sell orders to the staff, who subsequently analyze the orders to adjust the provisional price. This process is repeated until a price matches all the buy and sell orders placed by the floor members, clearing all trades.

  1. Limit Order

    An order placed with a brokerage to buy or sell a set number ...
  2. Exchange

    A marketplace in which securities, commodities, derivatives and ...
  3. Auction Market

    A market in which buyers enter competitive bids and sellers enter ...
  4. Commodity

    1. A basic good used in commerce that is interchangeable with ...
  5. Walrasian Market

    An economic model of a market process in which orders are collected ...
  6. Batch Trading

    An accumulation of orders that are executed simultaneously. Batch ...
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