An auction market is a setting that encourages buyers and sellers to compete. In an auction market, buyers express the highest price they are willing to pay for an asset, while sellers express the lowest price they are willing to accept.

An auction market is a financial marketplace where buyers and sellers submit competitive bids and offers, and transactions occur at the best available price. Prices are determined through an open bidding process, matching the highest bid with the lowest ask. This system ensures transparency and fair price discovery based on real-time supply and demand. Auction markets are commonly used in stock exchanges, commodity markets, and bond trading. Participants can see price quotes and place orders accordingly. Unlike dealer markets, where trades occur through intermediaries, auction markets directly connect buyers and sellers. The constant interaction of bids and offers causes prices to fluctuate throughout trading hours. This structure promotes liquidity, efficiency, and equal access to market information for all participants.