Zaraba method

AAA

DEFINITION of 'Zaraba method'

A method of matching orders that involves using an auction-like process to trade securities. The orders are organized by both their prices and the time that they were taken. As soon as an order for a security is delivered, it is compared and matched with orders already in the order book. When a bid comes in that matches the price requested by another order, the two orders are executed and taken out of the order book.

INVESTOPEDIA EXPLAINS 'Zaraba method'

The zaraba method is most often associated with the Japanese stock exchanges. Typically, the zaraba method is used during normal trading sessions, whereas a different order matching method, which is called the itayose method, is used to determine the opening and closing prices for each morning and afternoon trading session.

RELATED TERMS
  1. Depth of Market (DOM)

    A measure of the number of open buy and sell orders for a security ...
  2. Closing Price

    The final price at which a security is traded on a given trading ...
  3. Opening Price

    The price at which a security first trades upon the opening of ...
  4. Auction Market

    A market in which buyers enter competitive bids and sellers enter ...
  5. Itayose

    A clearing method used by Japanese commodity exchanges to set ...
  6. Historic Pricing

    A method for calculating the value of an asset using the last ...
Related Articles
  1.  These are the two main types of trades that investors will encounter: principal and agent transactions.
    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. Bonds & Fixed Income

    What determines the price of a bond in the open market?

    Learn more about some of the factors that influence the valuation of bonds on the open market, and why bond prices and yields move in opposite directions.
  5. What is Bitcoin's fair market value?
    Investing Basics

    The Easy Way To Measure Bitcoin's Fair Market Value: A Do-It-Yourself Guide

    How do you determine the fair market value of a currency that has appreciated faster than the shares of even the hottest technology stocks?
  6. Investing Basics

    The Auction Method: How NYSE Stock Prices are Set

    The New York Stock Exchange (NYSE), sometimes referred to as “the big board,” is the oldest and largest stock exchange in the United States. NYSE is the place investors think of when ...
  7. Investing Basics

    Designated Market Maker

    A designated market maker maintains fair and orderly markets for an assigned set of listed firms and improves market liquidity.
  8. Fundamental investing is the bases for other types of investing
    Active Trading Fundamentals

    Fundamental Investment Metrics For Buying Stocks And Bonds

    Don't let the name fool you. Even a "fundamental" investor has to pay attention to certain metrics.
  9. Two basic components to an option's premium are the time value and intrinsic value.
    Options & Futures

    Getting A Handle On The Options Premium

    The price of an option, otherwise known as the premium, has two basic components: the intrinsic value and the time value. Understanding these factors better can help the trader discern which ...
  10. Active Trading

    Don't Let Stock Prices Fool You

    Find out why a stock with a six-figure share price can still be a good value.

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center