The Indonesian Stock Exchange (BEI) has introduced new features to the Exchange’s trading system called Indicative Equilibrium Price (IEP) and Indicative Equilibrium Volume (IEV) on December 6 2021. These two features aim to increase transparency in the formation of opening and closing prices for stock trading.
Director of Trade and Regulation at AB BEI Irvan Susandy explained that the implementation of IEP and IEV is an important step in creating more transparent trading for investors.
Previously, the pre-opening and pre-closing sessions used a call auction (blind orderbook) mechanism without providing IEP and IEV information to investors.
“With the implementation of IEP and IEV, there is price and volume reference information to assist investors in determining the price of orders submitted to the system as a transaction strategy,” said Irvan in a written statement, Tuesday (16/4).
Irvan explained that this feature provides several benefits for investors. First, IEP and IEV information can be used as a price reference in call auction trading sessions, including pre-opening, pre-closing and periodic call auction sessions. This allows investors to know the equilibrium price of Securities according to all orders in the orderbook.
Then, continued Irvan, IEP and IEV also differentiate themselves from the previous features of the Exchange. Previously, in the call auction session, all orders were met at one price without providing indicative information to investors.
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“With the IEP and IEV, investors can obtain information on price and volume indications that will be met at the end of the session,” said Irvan.
Apart from that, Irvan explained that the role of IEP and IEV is also very important in stock trading on the Special Monitoring Board. In the periodic call auction mechanism, only IEP and IEV are displayed as indicative price and trading volume information. This allows investors to still participate in stock trading by utilizing information available in real-time.
“For example, if there is an investor who wants to buy a share with an existing IEP value and the investor wants to place a buy order, the investor can enter the IEP price by considering the available volume in the IEV. “If an investor wants greater matching potential, the investor can use a market order or make a buy order at a price slightly above the IEP value while still monitoring IEP movements because IEP and IEV will be calculated in real time every time there is a change in the order book,” he continued.
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To be able to take advantage of this feature, Irvan said investors can access IEP and IEV information via online trading or mobile trading applications belonging to Exchange Members during pre-opening, pre-closing trading sessions and periodic call auction sessions for shares on the Special Monitoring Board.
Apart from that, this information is also available via the IDX Mobile application which can be downloaded for free.
“By utilizing IEP and IEV information, investors can obtain information indicating the price that will be formed and the volume that will be found in the IEP price at the end of the session,” he concluded. (RO/Z-1)
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