Itayose system, also known as collective decision-making pricing trading system, is a public auction system adopted by most commodity exchanges in Japan. In the trading hall, the exchange staff standing on the platform announce a temporary reference price for each commodity in different contract months through sign language and bidding. Then, the traders in the trading hall use sign language to indicate the amount they are willing to buy or sell at this temporary price level. In the auction process, if the total number of purchases exceeds the total number of sales, the staff will raise the price to promote sales. On the other hand, if the total number of sales exceeds the total number of purchases, the staff will lower the price to promote the purchase until the quantity of purchases and sales finally reaches an agreement at a certain price level. At this time, the staff immediately patted two wooden clappers, announced the price as the official contract price, and demanded all the purchases and sales at that time. If the traders in the trading hall are unwilling to close the transaction at the temporary price announced by the staff, they can resell or repurchase (repurchase) in the form of reverse transaction during the bidding process when the staff adjusts the price up and down to offset the previously agreed business.
Japanese futures exchanges generally have two trading sessions in the morning and afternoon, and each session is divided into several time periods (plates) to trade different commodities. After this pricing system is used to determine the transaction price of formal contracts, all contracts in this trading interval are settled and settled at this price, so this system is also called trading outcry system. Like the public bidding system, the collective decision-making pricing system is very important and effective for maintaining the principle of open and equal free competition in the market and improving the price discovery mechanism in the futures market.
At present, Tokyo Industrial Products Exchange has begun to use the automatic trading system to trade precious metals, aluminum and oil futures. The system transforms centralized trading system into distributed trading system, which can provide better and more convenient services for market participants. To sum up, the new system has the following characteristics:
(1) has a more advanced backup system.
(2) Strong market monitoring ability.
(3) The ability to introduce options trading.
(4) Be able to make timely adjustments after the contract terms are revised.