Trading Concept

The Auction Principle

Spot market trading in CO2 certificates on EXAA started in June 2005. The orders placed by the market participants are first collected in a closed orderbook and none of the trading participants are able to view the bids of the others. Auctions are conducted on the respective exchange trading days. Market participants are informed of the prices determined at the auction (market clearing price = MCP) and the volumes allocated to the individual market participants immediately after the auction. Participants who are willing to sell have to submit their CO2 certificates before the auction takes place.
Basically the CO2 certificates of EXAA members remain on the registry account of the exchange. After a written instruction (email or fax) the certificates will be transferred back to the owners.
For buying certificates participants can choose between deposit of a bank guarantee or transfer of cash money to the EXAA bank account (Account Number: 31103727006 bank Code: 10.000, IBAN: AT551000031103727006, BIC: OEKOATWW) in advance. In case of cash deposit the money remains at the bank account until the assets are exhausted or the participant submits a  refund instruction (by email or fax).

Concentration of Liquidity

The principal objective of the operation of the trading platform with an auction system is to achieve the highest possible liquidity. An important measure taken since the start of the market was the introduction of the market maker concept for the CO2 market. Currently, there are two market makers (since the start of the market, EGL and since June 2006, Essent) on EXAA. The market makers guarantee fair market prices. The concentration of trading in a few days per month makes it possible to bundle liquidity and thus heighten trading efficiency. The neutrality of the exchange, the guaranteed anonymity of the bids and the immediate publication of the prices contribute substantially to the promotion of fairness in the overall market. The stringent statutory requirements and the constant monitoring of compliance with all criteria, makes EXAA a reliable counterparty for all trades concluded by market participants. The exchange is therefore an organized marketplace with simple and strictly regulated procedures. Another major benefit of exchange trading is efficiency. The expenses for concluding trades are significantly lowered, as in comparison to bilateral trading there are no high costs of searching for a trade partner. The trading days are announced in advance in the form of a trading calendar. Modifications are possible due to changing market requirements.

Trading Procedure