The highest priced buyer is matched with the equivalent price seller whose shares have been listed for the longest time. So, sellers who have been waiting the longest and are willing to accept the buyer’s offer are matched first.
The trades will always be matched and transact at the buyers’ price. In cases where there are several sellers stating the same minimum price, sellers will be prioritised according to how long their shares have been listed.
Example of how the matching policy works:
Tom wants to sell 2,000 shares at £2.50
Sue wants to sell 4,000 shares at £2.60
John wants to buy 1,000 shares at £2.40
Bob wants to buy 500 shares at £2.75
Lisa wants to buy 6,000 shares at £2.65
Bob purchases 500 shares from Tom at £2.75 (highest priced buyer matched with lowest priced seller who has been listed to sell for the longest period of time).
Lisa purchases 1500 shares from Tom at £2.65 and 4000 shares from Sue at £2.65 (Lisa is the second highest priced buyer and there are still shares available. The trade always transacts at the buyer’s price).
Lisa notifies the MBS provider that her request to purchase the remaining 500 shares at £2.65 should roll over to the next month’s auction. Lisa can consider changing the price and/or volume for the next month’s auction if she wishes.
John buys no shares at £2.40 as no one was selling at this price and his price was not high enough to beat Bob or Lisa’s. John can notify the MBS provider to roll his buy order on to the next month’s auction. The MBS provider will letJohn know the prices at which shares cleared so he can consider changing his price for the next auction.