(Yicai Global) April 27 -- The Shanghai Futures Exchange will introduce an extra central auction for contracts with day and night trading, or so-called continuous trading, to optimize trading mechanisms, promote fairer pricing, and reduce commodity price fluctuations.

The Shanghai Futures Exchange and its unit the Shanghai International Energy Exchange will bring in the change on May 26, the SHFE said yesterday. The additional central auction will be held in the five minutes before the 9 a.m. start of the day trading session, so each contract with continuous trading will have day and night central auctions, it noted.

Contracts with continuous trading on both bourses currently have only one central auction before the night session from 8.55 p.m. to 9 p.m. every trading day. For contracts with only day trading, the central auction is held from 8.55 a.m. to 9 a.m.

Exchanges add a central auction to optimize trading mechanisms, the SHFE noted. It promotes fairer prices for the start of the day trading session while reducing the impact of commodity price fluctuations from the end of the night session to the beginning of the day session on unfilled orders, thereby helping to maintain market fairness, it added.

Twenty futures contracts and six commodity options are available on the SHFE, covering major commodities, including copper, gold, stainless steel, and crude oil. CNY141.3 trillion (USD20.4 trillion) of futures were traded on the SHFE in the 12 months ended Dec. 31, accounting for 26 percent of the total in the Chinese market, data from the China Futures Association showed.

Editor: Martin Kadiev