Bovespa is the equities exchange of the BM&FBovespa exchange group which is the primary securities market in Brazil.
Currency: Brazilian Real (BRL)
Trading Summary
Bovespa uses the Mega Bolsa, a fully electronic trading system. For more information, see the Regulations and Manuals page.
Order Types (TIF)
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Limit (DAY/IOC/FOK)
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Limit Reserve (DAY)
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Market (DAY/IOC/FOK)
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Market (Auction)
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Market (On Close)
Basic Market Rules
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Lot Size: varies by symbol, though the most common is 100 shares.
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Tick Size: 1c.
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Short Sale Rules: naked short sales are prohibited. Short sell orders must be properly marked and a locate must be obtained.
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Circuit Breakers: circuit breakers are mechanisms used by the exchange to mitigate sharp fluctuations on the market and increase equilibrium between buy and sell orders.
Circuit Breaker Rules
| Rule | Description |
|---|---|
| 1 | If Ibovespa falls 10% in relation to the previous day’s closing index, trading on all exchange markets will be interrupted for 30 minutes |
| 2 | As trading resumes, if Ibovespa falls 15% in relation to the previous day’s closing index, trading on all exchange markets will be interrupted for 1 hour |
| 3 | As trading resumes, if Ibovespa falls 20% in relation to the previous day’s closing index, the exchange may determine the suspension of tradings in all markets for a defined period and such decision must be disclosed to the market through the news agency |
Rules 1–3 do not apply during the last half hour of the trading session. If trading is interrupted during the second-to-last half hour of a session, at the time trading resumes the schedule will be extended for 30 minutes at most, without any further interruption, in order to ensure a final trading period of 30 consecutive minutes.
Auction Mechanisms
Open
The opening auction takes place between 9:45 am and 10:00 AM. Orders entered prior to this period are used as input to calculate the theoretical opening price.
Close
During Regular Trading (10:00 – 17:55):
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Continuous trading occurs
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Bids and offers may be entered with an “At the close” validity tag, which leaves the orders dormant until the closing call
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Closing bids and offers can be entered, amended, and cancelled until the closing call
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No closing bids or offers are matched
During Closing Auction (17:55 – 18:00)
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Bids and offers may be entered and amended favorably
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No hidden orders will be accepted once the closing call begins
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Bids equal to or above, and offers equal to or below, the theoretical closing price range may not be cancelled or amended unfavorably; e.g., bid quantity may be increased but not decreased
Note: the closing call for ETFs is different at 17:55 – 18:15.
Closing Call Extension (18:00 – 18:05, conditional)
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Orders may be submitted similarly to closing call for participation in the closing theoretical price
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Bids and offers will be matched with the closing theoretical price
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Time extension conditional upon the extension criteria met to:
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Change in the theoretical price
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Change in theoretical quantity
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Registration of a new offer that modifies the quantity taken up of a previously registered offer
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Change in the balance not taken up
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Note: traders may use Limit Market-on-close (MOC) or Limit orders during the closing call to participate in the uncrossing.
Auction Triggers
When one of the following conditions occurs, an auction is held:
| In relation to trading quantity | Auction Schedule |
|---|---|
| With a lot 5–10 times the average traded volume over the last 30 sessions | Auction with 5-minute deadline |
| With a lot more than 10 times the average traded volume over the last 30 sessions | Auction with 5-minute deadline |
| In relation to companies’ stock capital | Auction Schedule |
|---|---|
| With a lot 0.5%–0.99% of common stock | Auction within 5 minutes |
| With a lot 1%–2.99% of common stock | Auction within 1 hour |
| With a lot 3%–6% of common stock | Auction within 24 hours |
| With a lot over 6% of common stock | Auction within 48 hours |
| With a lot 1%–2.99% of preferred stock | Auction within 15 minutes |
| With a lot 3%–4.99% of preferred stock | Auction within 1 hour |
| With a lot 5%–20% of preferred stock | Auction within 24 hours |
| With a lot over 20% of common stock | Auction within 48 hours |
| In relation to quote | Auction Schedule |
|---|---|
| With positive or negative variation of 3%–8.99% on the last price of securities participating in the exchange index portfolio | Auction within 5 minutes |
| With positive or negative variation of more than 9% on the last price of securities participating in the exchange index portfolio | Auction within 15 minutes |
| Other securities with positive or negative variation of 10%–19.99% on the last price | Auction within 5 minutes |
| Other securities with positive or negative variation of 20%–49.99% on the last price | Auction within 15 minutes |
| Other securities with positive variation of 50%–99.99% on the last price | Auction within 30 minutes |
| Other securities with variation of more than 100% on the last price | Auction within 1 hour |
| Other securities with negative variation of more than 50% in relation to the last price | Auction within 1 hour |
| With positive or negative variation from 10% in relation to the reference price established by the Exchange | Auction with a duration of 1 to 15 minutes |
| In relation to tradability | Auction Schedule |
|---|---|
| Stock not traded over the last 5 sessions | Auction within 15 minutes |
| Stock traded for the first day of trading on the exchange | Auction within 15 minutes |
Pricing Mechanism for Auctions
| Auction Price Criteria | Details |
|---|---|
| First Criterion | The price attributed to an auction is the one at which the largest quantity of the stocks is traded. |
| Second Criterion | If there’s any tie in the quantity traded at two or more prices, two prices are selected: the least imbalanced sale and the least imbalanced purchase. The price attributed to the auction may be equal to one of these prices, or between them; the price nearest to the last trade is chosen, or if the security has not been traded during the day, the price chosen for the auction will be the one nearest the last closing price. |
| Third Criterion | If the two criteria above lead to a tie, the price selected for opening the auction will be part of a scale of prices that may or may not include limit prices depending on the amount of imbalance. |
Matching Priorities
The following order of priority is observed during auctions:
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Market on Auction: these orders have highest priority. If, when opening the auction, such an offer is not fully taken up, the unmatched portion of the offer will be eliminated; and
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Limit Order: by price order and chronological entry order.
For more information about the trading mechanisms on BM&FBovespa, see the Regulations and Manuals page.
