The AX Trading Network (The AX), the new electronic trading community, now offers members the ability to schedule an AX auction in advance and to notify or invite other members that an auction is going to take place at a specific time.
The AX auction can be scheduled during market hours or -- with AX's new expanded trading hours -- during pre- or post- market hours as well.
The AX was the first stock trading venue to introduce the model of a "trader-initiated" call auction. While call auctions have been used in trading for more than 200 years and while they are still used to open and close most major exchanges and also in the recently enacted rules regarding single stock circuit breakers, The AX was the first to put this powerful tool into the hands of traders allowing them to "call" their own auctions and to determine what information to share about the auction -- if any -- and whom to invite to the auction. Since its launch in November 2011, The AX has seen dramatic growth in membership, availability liquidity and completed auctions.
"The scheduled auction adds a new dimension to the AX trading process," said AX CEO Kevin Callahan. "The scheduled auction is clearly not for every trade. But for especially large or especially illiquid trades, our members were looking for us to provide a way to create a more unique 'liquidity event,' so that they could give participants more advanced notice of the auction in order to consider their level of interest and participation."
As with all AX auctions, the scheduled auction is only triggered by a firm order that is routed to AX and marked as an "Initiated" order. In this case, the order is routed to AX at the time the auction is scheduled and "Invitations to Trade" (ITTs) are sent out notifying members that the auction has been scheduled and indicating the time of the auction. If the order is canceled, the scheduled auction is canceled and all participants are notified. As with "On Demand" auctions, the initiator of the scheduled auction can determine whether to run a Blind or Disclosed auction and what types of counterparties to invite to the auction.