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. Auction Market

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

    A clearing method used by Japanese commodity exchanges to set ...
  4. Closing Price

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

    The price at which a security first trades upon the opening of ...
  6. Historic Pricing

    A method for calculating the value of an asset using the last ...
Related Articles
  1. Principal Trading and Agency Trading
    Investing Basics

    Principal Trading and Agency Trading

  2. Getting To Know The Stock Exchanges
    Options & Futures

    Getting To Know The Stock Exchanges

  3. Understanding Order Execution
    Investing Basics

    Understanding Order Execution

  4. What determines the price of a bond ...
    Bonds & Fixed Income

    What determines the price of a bond ...

Hot Definitions
  1. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  2. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  3. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  4. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
Trading Center