CME ‘proud’ of silver fix system
By GCRU Gold News on Thursday, October 23 2014, 12:46 - Permalink
Under the new rules, the price discovery takes place at noon London time via an electronic auction, with each auction round lasting 30 seconds.
An opening price is selected; participants then decide how much they would like to buy and sell at that price.
If the discrepancy between buy and sell orders is more than 300,000 ounces, the auction price will change and the auction will restart. Each time the auction restarts, it clears the order book entirely – any orders must be re-entered.
This process repeats until the buy and sell volumes are within that 300,000-ounce tolerance level, at which point the London Silver Price is set.
Amid tighter regulatory requirements for verifiable data, CME says that it will be able to show that not only were the trades agreed upon but they also were settled, giving total confidence that the price reflects true buying and selling, Hunnable said.
“In a very short time, we’ve taken a market that was doing this on pen and paper on the telephone to an electronic platform,” she added. “We have moved from a small group – we have almost doubled our participants that are signed up and active in the silver platform today.”
“This is the end of old club, so there’s no fixed number.