What is the Continuous Auction Method?

Also called the Zaraba method, the continuous auction method is a method of trading securities.

How Does the Continuous Auction Method Work?

In the continuous auction method, which many Japanese exchanges use, the exchange fills orders by matching them with other orders according to the order price and age. Here is an example of how the method works:

Zaraba Method_Page_1(1)

Why Does the Continuous Auction Method Matter?

The continuous auction method helps exchanges ensure that trading is uninterrupted throughout the trading day, primarily on the Tokyo Stock Exchange.