Deutsche Börse launches Xetra market close mechanism

Traders will be able to enter orders on Xetra for 10 minutes after the closing auction has ended when tool goes live on 24 November at Deutsche Börse.

European exchange operator Deutsche Börse will launch a new market phase for traders to execute at the official closing price for all securities in Xetra.

Named Xetra Trade-at-Close, the mechanism will go live on 24 November and will allow market participants to enter orders on Xetra after the closing auction has ended.  All instruments on Xetra including blue chips, small and mid-caps, ETFs and ETPs can be traded through the tool.

The extended window for trading will for a maximum of 10 minutes after the closing auction ending at 17:45 CET and during the session matching will take place continuously at a fixed and single price with time priority. 

Orders not filled in the closing auction will automatically be transferred into the Trade-at-Close phase on an opt-in basis. New orders can also be entered during Trade-at-Close and traders can opt-in at the trader and order level. 

Deutsche Börse said that participants will benefit from trading at a fixed price without participating in the price formation process in the closing auction, while gaining access to additional liquidity by closing out positions before the end of the trading session.

“Closing auctions are considered a pillar of market stability and investor protection. They allow for the concentration of liquidity, ensuring efficient price formation while considering all relevant information. Xetra Trade-at-close meets the market’s rising demand to execute orders at the end of the trading day,” said Michael Krogmann, board member of the Frankfurt Stock Exchange, part of Deutsche Börse. 

Deutsche Börse is the latest exchange operator to launch a tool aimed at the closing auction as trading volume across Europe continue to migrate towards the close.

Last month, the London Stock Exchange Group’s Turquoise went live with its own closing auction mechanism, Trade At Last. Similar to Deutsche Börse, Trade At Last allows traders to submit firm and conditional orders for an additional 10 minutes after the closing auction has completed its price formation process and published the official closing price at 4.35 pm.