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Hong Kong Market

    How does the price limit in the Pre-opening session work?

    A two-stage price limit mechanism is applied to control the price of at-auction limit orders (i.e. at-auction orders and manual transactions are not subject to these price limits) which are input during the POS.

     

    Applicable Period(s)

    Time / Duration

    Allowable Price Limits

    Stage 1

    Order Input Period

    9:00am - 9:15am

    Stage 1 Upper and Lower Price Limits are ± 15% from previous closing price respectively

     

    • Buy orders: Previous Close -15% ≤ Order Price ≤ Previous Close + 15%

       

    • Sell Orders: Previous Close -15% ≤ Order Price ≤ Previous Close + 15%

    Stage 2

    No-Cancellation Period

     

    and

     

    Random Matching Period

    9:15am - time of random matching

    Stage 2 Upper Price Limit = the higher of the highest bid price and the lowest ask price recorded at the end of the Order Input Period at 9:15am.

     

    Stage 2 Lower Price Limit = the lower of the highest bid price and the lowest ask price recorded at the end of the Order Input Period at 9:15am.

     

    • Buy Order: Previous Close – 15% ≤ Order Price ≤ Stage 2 Upper Limit

       

    • Sell Order: Previous Close + 15% ≥ Order Price ≥ Stage 2 Lower Limit

     

    IEP will only be formed within the range of the highest bid price & lowest ask price recorded at the end of Order Input Period at 9:15am

     

    Stage 1 price limit: applicable to the Order Input Period between 9:00am - 9:15am

    The price limits are set at ±15% from the POS reference price, which is the previous closing price of a POS Security (or the adjusted closing price for POS Securities that have undergone corporate actions).

    At-auction orders and at-auction limit orders within the ± 15% of the previous closing price can be entered starting from the Order Input Period.  An at-auction limit order which has a limit price outside the permissible price limit will be rejected by the OTP-C.

    The Stage 1 price limits and the POS reference price are disseminated to the market via Orion Market Data Platform – Securities Market (OMD-C) before the start of the Order Input Period.

    In the absence of a previous closing price (e.g. for IPO stocks) or for stocks resuming from trading suspension[1], the Stage 1 price limit checking will be not be applied for the Order Input Period.

    Stage 2 price limit: applicable to the No-Cancellation Period and Random Matching Period between 9:15am - 9:22am

    Starting from the No-cancellation Period, the allowable price limits will be further tightened and is set at the highest bid price and the lowest ask price recorded at the end of the Order Input Period at 9:15am.  More specifically:

    Stage 2 Upper Price Limit = the higher of the highest bid price and the lowest ask price recorded at the end of the Order Input Period at 9:15am.

    Stage 2 Lower Price Limit = the lower of the highest bid price and the lowest ask price recorded at the end of the Order Input Period at 9:15am.

    The Stage 2 price limits will remain unchanged for the whole period of No-cancellation and Random Matching Periods and the price limits will be disseminated to the market via OMD-C at the beginning of No-cancellation Period. 

    During the No-cancellation Period and Random Closing Period, the prices of newly input at-auction limit orders that aim to be executed during the POS must be between the Stage 2 Upper Price Limit and the Stage 2 Lower Price Limit since the final IEP will only be formed within the Stage 2 price limits, and no orders can be amended or cancelled. 

    At this stage, in order to build an order book with deeper liquidity after the market opens, passive at-auction limit orders (i.e. buy order price lower than the Lower Price Limit and sell order price higher than the Upper Price Limit) will still be accepted provided that these orders are within ±15% from the previous closing price.  However, it should be noted that these passive orders will not be matched during the POS since their prices fall outside the range of Stage 2 Upper Price Limit and Lower Price Limit.

    In case only buy orders or only sell orders exist (or both do not exist) at the end of Order Input Period at 9:15am, the Stage 2 price limits will be set at ±15% from previous closing price (i.e. same as Stage 1 price limit).

    [1] For stocks resuming from a trading suspension, the Stage 1 price limit check will not be applied for the first day of trading resumption only (no matter whether there is trade recorded on the day of trade resumption or not).