What is the price cage mechanism?

The so-called price cage mechanism is actually the price range declared by pending orders.

There is an unlimited price, and the declared purchase price is ≤ 65438+ 002% of the benchmark purchase price; The declared selling price is ≥ 98% of the benchmark selling price.

For the convenience of buying and selling, it is not feasible for investors to fill in the form directly according to the daily limit and the daily limit. Pay special attention to this.

To give a common example, an actively traded stock usually has five purchases and five sales.

Buying is "limited to buying high", and it is not allowed to hang high prices at will. If the selling price is 10.50, then10.50 *102% =10.71,and the price cannot be higher than it.

Selling "limited to low sales" is not allowed to hang low prices at will. If you buy one for 9.50, then 9.50*98%=9.3 1, and sell the pending order, the price cannot be lower than it.

The fourth paragraph of Article 2 of the Special Provisions on Growth Enterprise Market Trading of Shenzhen Stock Exchange recently issued by Shenzhen Stock Exchange stipulates that the price increase and decrease declaration exceeding the effective bidding range cannot immediately participate in the bidding and is temporarily stored in the trading host; When the price fluctuation makes it enter the effective bidding range, the trading host automatically takes out the declaration and participates in the bidding. To put it simply, if the commission of GEM exceeds 2%, it will not be scrapped, but it will be kept in the system for you until the stock trend fluctuates within the price range of 2%.

Paragraph 5 of Article 16 of the Special Provisions on Stock Trading of Science and Technology Innovation Board of Shanghai Stock Exchange issued by Shanghai Stock Exchange on March 20 19 shows that when our best price declaration enters the trading mainframe, if we don't declare it in the centralized declaration book, the declaration will be automatically revoked. When the counterparty's optimal price declaration enters the trading host, if there is no counterparty's declaration in the centralized declaration book, the declaration will be automatically cancelled. In other words, the expression of the "price cage" in the Science and Technology Innovation Board is a quotation that exceeds the price limit. If it is entrusted to calculate the scrap bill, it will be directly invalid.

In fact, it is hard to say which is the better price cage mechanism between Shenzhen Stock Exchange and Shanghai Stock Exchange.

Science and technology innovation board directly cancels the bill payment. In the sharp fluctuation market where the price rises rapidly and hits a straight line, it will frequently fail to pay the bill, which will eventually lead to the discontinuous transaction of "buy five and sell five".

The temporary host of GEM solves the problem that the application is easy to fail, and also meets the needs of investors who want to buy near a certain price and are willing to pay a premium of 1%-2% to chase after the high price, so as to prevent them from missing the trading opportunity.

However, the temporary custody of GEM has caused another problem. Some large funds may use this mechanism to manipulate the market. For example, after the preliminary layout is completed, prepare for the pull-up stage, ambush the bill at a high position in advance, and pay the bill at all price points within the range of +2%. According to the regulations, such orders cannot be sold immediately, but are temporarily stored in the trading host. When the stock price rises to a certain price, these "dormant" buyers will be awakened, which will trigger the "turbocharging effect". The stock price will go up a step and trigger a wave of buyers, which will lead to a continuous inflation. Ordinary retail investors who don't understand are likely to be emotionally chasing up, leading to eating sets.