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TSE Rules in Brief

by iDog

WARNING: I found that there are quite a few visits to this page recently. Please note that this page was created in 2009. The info here is not up-to-date for there has been many changes happened at TSE. Please keep this in mind when you refer to this page.

TSE: Tokyo Stock Exchange (東京証券取引所).

Trading Time

Morning SessionAfternoon Session
orders accepted08:00 ~ 11:0012:05 ~ 15:00
orders traded09:00 ~ 11:0012:30 ~ 15:00
market info provided08:20 ~ 11:0012:05 ~ 15:00
opening auction09:0012:30
closing auction11:0015:00

Orders are valid for one day only.

Note: OSE(大阪証券取引所) & Hercules (ヘラクレス) ends at 15:10. Jasdaq (ジャスダック) has the same time as TSE.

Types of orders

  • limit order: orders are only executed at limit price or better
  • market order

Tick Size

Tick size is the increment by which prices move. It depends on price.

pricetick size
(0, 2000)1
[2000, 3000)5
[3000, 30000)10
[30000, 50000)50
[50000, 100000)100

Daily Price Limits

Daily upper limit price and daily lower limit price. Decided by base price.

Base price: previous trading day's closing price, or special quote (if there was not a closing price), minus dividend if it's ex-dividend day.

Purpose of daily price limits: protect investors from excessively volatile markets, since TSE is a pure order-driven market without specialists or market makers to guide price formation. The price limits provides a time-out and cooling down period.

base pricedaily price limit (+/-)
< 10030
[100, 200)50
[200, 500)80
[500, 1000)100
[1000, 1500)200

Eg: current price is 300, then the limits are [220, 380] (300 +/- 80).

Ex-dividend day

TSE uses T+3 settlement cycle, that is, the traded result is to be settled after 3 business days.

No.Explanationsettlement datedividend?*
1 T+3 (No. 4)Y
2ex-dividend dateT+4 (No. 6)N
3 T+3 (No. 6)N
4 T+3N
5shareholder confirmation dateT+3N
6 T+3N

* means if a stock is bought on that day, if the buyer can get the dividend.

The base price on ex-dividend date (No. 2 in above table) is previous closing price or special quote - dividend.

Trading Unit

Minimum number of shares that can be traded. Also called 'lot size'. It can be 1 ~ 3000 shares. 1000, 100 and 1 & 500 are the top four trading units.

Stock Prices Determination

Stock prices are determined by two methods:

  • Itayose (板寄せ)
  • Zaraba (ザラ場)

Itayose: used to determine following prices:

  • opening & closing price
  • initial price after resumption (when there was a trading halt)
  • price when a special quote is indicated

No time priority: All orders reaching order book are treated as simultaneous orders.

Only price priority.


  • all market orders must be executed
  • all limit orders better than execution price must be executed
  • (at exec price, one side must be all executed; at least 1 unit on the other side must be executed) (iDog: it's obvious)



Opening price is the one at which bids and asks are balanced out. If we check aggregated ask/bid quantities, and look for the two prices where relationship of aggregated ask/bid quantities change, then the opening price is one of them. In above example, at price 500, aggregated ask price < aggregated bid price, but at price 501, aggregated ask price > aggregated bid price. So opening price must be one of them.

How to determine the opening price:

  • method 1: don't calc aggregated quantities; check from the best bid and best ask, step by step, until bid price and ask price meet.
  • method 2: calc aggregated quantities, find the two possible prices, then calc from there.

Examples on how to determine opening prices

Zaraba: continuous auction method, used in continual process to match orders.

Order's priority

Priority among orders is decided on:

  • price priority
  • time priority

Simultaneous Orders

Orders are treated as simultaneous orders (so no time priority) under following situations:

  • orders placed before opening price is determined
  • orders placed before initial price is determined after resumption (when there was a temp trading halt)
  • orders at daily limit price: these orders will be executed with market orders at closing price of afternoon session (or morning session if it's a half-day holiday).

All remaining orders from morning session are treated as simultaneous orders at beginning of afternoon session (according to #1 above).

Distribution of simultaneous orders (soon): not so important to us.

Special Quotes

TSE prevents stock price from moving big jumps from last execution price by using special quote. The biggest allowed gap from last execution price is called 'quote pamameter', which is determined by the last execution price.

last exec pricequote parameter (+/-)
< 5005
[500, 1000)10
[1000, 1500)20
[1500, 2000)30
[2000, 3000)40

When the next price is anticipated to be at a price out of range [base - quote_param, base + quote_param], then a special quote is indicated to encourage investors to place orders on the proper side to balance orders in order book.

After special quote is indicated for 5 minutes without any additional orders to balance the order book, special quote moves one more step (size is the 'quote parameter'). This can go on until it reaches the daily limit price.

Once special quote is indicated, executions take place using Itayose instead of Zaraba.

Special quote can happen before opening, or during continuous trading.

Examples of special quotes (soon)

Special quotes cannot be renewed beyond the price of the order that originally prompted it. For example, last exec price is 950, so quote param is 10. But now lowest offer price is 990, and there is a buy order at 980. This triggers a SQ at 960. Supposing there are no sell orders at a lower price placed, the SQ can go to 970 and then 980, but it cannot go further, since the order that triggered it is at 980.

Closing auction at limit price

Newly listed stocks

If a stock is newly listed, and it has also never been listed on any other markets, then before its initial price has been determined, the following special rules apply to it:

  • Daily price limit does not apply.
  • more flexible special quotes: SQ can renew up to a price of approximately double the offering price, or down to 70% of the offering price. Intervals for renewal by time and price are not fixed, so TSE may flexibly determine them based on the real time order flow.

Trading halt

  • temporary trading halt:
    • companies about which important info (such as merger, allotment to a 3rd party, and capital reduction) is officially disclosed: trading resumes 30 min after official announcement.
    • companies about which unclear but materially important info is broadcast via info vendors or other news sources: trading resumes 30 min after the official announcement.
  • built-in trading halt: when shareholders have to submit stock certificates to company due to merger of shares, stock-split and so on. It lasts from 3 days before submit-due date to the day before the event (merger, stock-split, etc.) takes effect.

Supervision/liquidation post

  • supervision post: assigned when stocks are likely to fall under any of TSE's de-listing criteria. Traded exactly same as ordinary stocks. When reason of assignment is eliminated, it goes back to ordinary trading; otherwise, it is assigned to liquidation post.
  • liquidation post: assigned in order to warn investors and give them enough time to trade out of the stock. Traded almost the same as ordinary stocks, but lower limit can go down to 1. After 1 month, the stock is de-listed.

Broadening daily price limit

Doubled daily price limit:

TSE doubles upper/lower daily price limits of a stock on the 4th trading day on following conditions:

  • no transactions has been processed during the previous 3 trading days
  • special quote was indicated at the upper/lower limit price at the closing of each of the prev 3 trading days

Once doubled, if a transaction is executed not at the daily limit price, TSE tightens the limit back on the next trading day.

Once doubled, if no transaction is executed, or only transactions at daily limit price are executed, TSE continues to double the upper/lower daily price limit on the following trading day.

Abolition of daily price limit:

When a stock is assigned to trade on liquidation post, its price may take several days to go down to 1. In this case, TSE supervises the order flow of the stock on the 1st trading day after the assignment of liquidation post, when TSE judges that it will obviously drop, TSE broadens the lower limit price to 1 on the next trading day.

Market info available to investors

  • price of every transaction
  • OHLC (open/high/low/close prices)
  • trading value & trading volume
  • TOPIX (TOkyo stock Price IndeX): reflects entire TSE First Section (東証1部).
  • 5 best offer/bid quotes
  • special quote
  • pre-opening quote (from 8:20 in morning session; 12:05 in afternoon session)

trading value = sum(trading_price * trading_quantity)

trading volume = sum(trading_quantity)


ToSTNeT: Tokyo Stock exchange Trading NeTwork system. TSE's new trading system for off-hour trading.