The correct spelling of the phrase "call market" is /kɔːl ˈmɑːkɪt/. The IPA symbol /ɔː/ represents the open-mid back rounded vowel sound in "call," while the stress is on the first syllable. The symbol /ɑː/ represents the open back unrounded vowel sound in "market." Overall, this phrase denotes a market where trading occurs only within a specific time frame set by the market's governing body. Investors who wish to participate in this type of trading must enter their orders before the market's predetermined call time.
A call market is a type of financial market where trading activity occurs during specific fixed time periods, called call periods or call sessions. It is a method used for trading securities, commodities, or other financial instruments, usually occurring on a stock exchange or other organized trading platform.
During a call market, buyers and sellers submit their orders to a central authority, such as an exchange or a designated market maker. These orders are then matched and executed at a specified price or within a predetermined price range, known as the call price or call range. The call price is often determined based on the equilibrium point where there is maximum order matching.
Trading in a call market is typically more structured compared to continuous trading, as it occurs only at specific intervals, which can be daily, weekly, or at other predetermined intervals. During the call period, traders have the opportunity to submit their orders, which are usually disclosed to other participants before the call session ends.
The call market system aims to enhance transparency and reduce price volatility by promoting fair and orderly trading. It allows market participants to gather and process information before submitting their orders, potentially leading to more informed trading decisions.
Call markets are commonly used for illiquid securities or those with limited trading activity, as well as in certain derivatives markets. These markets often have rules and regulations specific to call trading, ensuring proper execution and maintaining market integrity.
The term "call market" originated from the combination of two different words: "call" and "market".
The word "call" in this context refers to when a broker or exchange "calls in" all outstanding orders and matches them based on a specific set of rules or criteria. It is derived from the verb "to call", meaning to summon or bring together.
The word "market" in this context refers to the system or place where buying and selling of securities or commodities occur. The term "market" itself has various origins, but it can be traced back to the Latin word "mercatus", meaning a market or trade.
When combined, "call market" refers to a specific type of market structure or mechanism where an exchange or broker gathers all outstanding buy and sell orders and matches them according to predetermined rules or criteria.