Brazilian Stock Exchange (BOVESPA)

Brazilian Stock Exchange (BOVESPA)

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)

Limit (DAY/IOC/FOK)
Limit Reserve (DAY)
Market (DAY/IOC/FOK)
Market (Auction)
Market (On Close)

Basic Market Rules

Lot Size: varies by symbol, though the most common is 100 shares.
Tick Size: 1c.
Short Sale Rules: naked short sales are prohibited. Short sell orders must be properly marked and a locate must be obtained.
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):

Continuous trading occurs
Bids and offers may be entered with an “At the close” validity tag, which leaves the orders dormant until the closing call
Closing bids and offers can be entered, amended, and cancelled until the closing call
No closing bids or offers are matched

During Closing Auction (17:55 - 18:00)

Bids and offers may be entered and amended favorably
No hidden orders will be accepted once the closing call begins
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)

Orders may be submitted similarly to closing call for participation in the closing theoretical price
Bids and offers will be matched with the closing theoretical price
Time extension conditional upon the extension criteria met to:
- Change in the theoretical price
- Change in theoretical quantity
- Registration of a new offer that modifies the quantity taken up of a previously registered offer
- Change in the balance not taken up

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:

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
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.

Additional Info

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