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. Auction Market

    A market in which buyers enter competitive bids and sellers enter ...
  3. Exchange

    A marketplace in which securities, commodities, derivatives and ...
  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 ...
Related Articles
  1. Investing Basics

    Principal Trading and Agency Trading

    Ever wonder what happens behind the scenes when you buy or sell a stock? Read on and find out!
  2. Options & Futures

    Getting To Know The Stock Exchanges

    Here are the answers to all the questions you have about stock exchanges but are too afraid to ask!
  3. Investing Basics

    Understanding Order Execution

    Find out the various ways in which a broker can fill an order, which can affect costs.
  4. Insurance

    Futures Fundamentals

    For those who are new to futures but want a solid understanding of them, this tutorial explains what futures contracts are, how they work and why investors use them.
  5. Options & Futures

    Terrorism's Effects on Wall Street

    Terrorist activity tends to have a negative impact on the markets, but just how much? Find out how to take cover.
  6. Economics

    4 Countries in Recession and Crisis Since 2008

    See which major world economies haven't recovered from the global recession in the early 21st century, including a long-stagnant industrial power in Asia.
  7. Investing Basics

    Explaining the Liquidity Preference Theory

    According to the liquidity preference theory, investors demand interest in return for sacrificing their liquidity.
  8. Investing News

    3 Risks Japanese Companies Face

    Japan’s stock market has strengthened under the Abe administration, but it isn’t a panacea for Japanese companies.
  9. Economics

    10 Countries With Lower Interest Rates Than the US

    Learn about the 10 countries with lower interest rates than the United States and how interest rates indicate a country's economic outlook.
  10. Options & Futures

    Ultra ETFs Are Not Your Father's ETFs

    Ultra ETFs can add huge returns to your portfolio, but there's a lot of risk and volatility involved with these leveraged ETFs.
  1. Do hedge funds invest in commodities?

    There are several hedge funds that invest in commodities. Many hedge funds have broad macroeconomic strategies and invest ... Read Full Answer >>
  2. Can mutual funds invest in options and futures?

    Mutual funds invest in not only stocks and fixed-income securities but also options and futures. There exists a separate ... Read Full Answer >>
  3. Is Japan an emerging market economy?

    Japan is not an emerging market economy. Emerging market economies are characterized by low per capita incomes, poor infrastructure ... Read Full Answer >>
  4. How do futures contracts roll over?

    Traders roll over futures contracts to switch from the front month contract that is close to expiration to another contract ... Read Full Answer >>
  5. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  6. Why do companies enter into futures contracts?

    Different types of companies may enter into futures contracts for different purposes. The most common reason is to hedge ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  2. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  3. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  4. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  5. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
  6. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the legal sense may also refer to an exemption from liability ...
Trading Center