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Call Market

What is a 'Call Market'

A call market is a type of market in which each transaction takes place at predetermined intervals and where all of the bid and ask orders are aggregated and transacted at once. The exchange determines the market clearing price based on the number of bid and ask orders. A call market is contrasted to an auction market, where orders are filled as soon as a buyer/seller is found for any given order at an agreed upon price.

Explaining 'Call Market'

In a call market, the price is set by the exchange so the market will clear, or almost clear, every time orders are filled. This is in stark contrast to the auction market, where prices are determined by buyers and sellers.

Because the call market groups transactions together, there is a substantial increase in liquidity. Although liquidity is generally considered to be a good quality in any marketplace, sellers may lose some of the liquidity premium, which is can be substantial.


Further Reading


Price bubbles and crashes in experimental call markets
www.sciencedirect.com [PDF]
… Fig. 2. Trading volume expressed as turnover. relative performance of call versus double continuous auction asset markets await further research. References Cason, TN, 1992, Call market efficiency with simple adaptive learning, Economics Letters, 40, 27-32 …

Performance of various transaction frequencies under call markets: The case of TaiwanPerformance of various transaction frequencies under call markets: The case of Taiwan
www.sciencedirect.com [PDF]
… Fig. 2. Trading volume expressed as turnover. relative performance of call versus double continuous auction asset markets await further research. References Cason, TN, 1992, Call market efficiency with simple adaptive learning, Economics Letters, 40, 27-32 …

How does the call market method affect price efficiency? Evidence from the Singapore Stock MarketHow does the call market method affect price efficiency? Evidence from the Singapore Stock Market
www.sciencedirect.com [PDF]
… Fig. 2. Trading volume expressed as turnover. relative performance of call versus double continuous auction asset markets await further research. References Cason, TN, 1992, Call market efficiency with simple adaptive learning, Economics Letters, 40, 27-32 …

Is economics performative? Option theory and the construction of derivatives marketsIs economics performative? Option theory and the construction of derivatives markets
www.cambridge.org [PDF]
… Fig. 2. Trading volume expressed as turnover. relative performance of call versus double continuous auction asset markets await further research. References Cason, TN, 1992, Call market efficiency with simple adaptive learning, Economics Letters, 40, 27-32 …

The interrelations of finance and economics: Theoretical perspectivesThe interrelations of finance and economics: Theoretical perspectives
www.jstor.org [PDF]
… Fig. 2. Trading volume expressed as turnover. relative performance of call versus double continuous auction asset markets await further research. References Cason, TN, 1992, Call market efficiency with simple adaptive learning, Economics Letters, 40, 27-32 …

Call market trading: history, economics, and regulationCall market trading: history, economics, and regulation
link.springer.com [PDF]
… Fig. 2. Trading volume expressed as turnover. relative performance of call versus double continuous auction asset markets await further research. References Cason, TN, 1992, Call market efficiency with simple adaptive learning, Economics Letters, 40, 27-32 …

Constructing a market, performing theory: The historical sociology of a financial derivatives exchangeConstructing a market, performing theory: The historical sociology of a financial derivatives exchange
www.journals.uchicago.edu [PDF]
… Fig. 2. Trading volume expressed as turnover. relative performance of call versus double continuous auction asset markets await further research. References Cason, TN, 1992, Call market efficiency with simple adaptive learning, Economics Letters, 40, 27-32 …



Q&A About Call Market


How do you differentiate between goods and services?

Goods are tangible objects that satisfy human wants or needs while services are intangible objects that do not satisfy human wants or needs but rather provide for those wants or needs to be satisfied at some point in the future (e.g., insurance).

What is a market?

A market is a composition of systems, institutions, procedures and social relations whereby parties engage in exchange.

Why would sellers lose some of their liquidity premium in a call market?

Because transactions are grouped together, there is an increase in liquidity.

How does the exchange determine the price for a call market?

The exchange determines the price based on the number of bid and ask orders.

What is a call market?

A call market is a type of market in which each transaction takes place at predetermined intervals and where all of the bid and ask orders are aggregated and transacted at once.

Is there any liquidity premium in a call market?

There is no liquidity premium in a call market.

Are there different factors that can be found on markets?

Yes, labour and capital.

Why would people want to participate in exchanges with one another?

In order to get what they need/want from others who have something they need/want. This is known as specialization which allows for an increase in productivity through economies of scale which leads to lower costs for consumers (i.e., prices go down). It also allows individuals to focus their time on what they do best which increases quality of life because people will have more time doing things they enjoy instead of having to spend all their time trying to produce everything themselves (i.e., higher wages). Specialization also allows for greater variety which makes it easier for consumers since they don't have to worry about finding someone who sells exactly what they want; if someone doesn't sell exactly what you want then you can just buy from someone else who does sell it even if it's slightly more expensive than the other option because your overall cost will still be less than if you had tried making it yourself plus whatever extra money you spent was worth the convenience since now you don't have to spend all your free time searching around looking for something specific

What are the main products that can be found on markets?

Goods and services.

Are there different types of markets?

Yes, there are different types.

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