Question: How does the trading process work?
Answer: Step 1: Before participating in their first trading event, a seller or bidder (buyer) confirms acceptance of the terms and conditions of participation via their submission of the Participation Agreement (available for download on this site).
Step 2: Prior to the date of each trading event, each seller specifies what lots it will offer for sale in the trading event and sets the starting price for each of its lots. The seller’s starting price for a lot is the minimum price that the seller will accept for the lot. Also, prior to the date of each trading event, each seller informs the Trading Manager which bidders the seller will allow to bid on the seller’s lots, and whether the seller is imposing any limitations on the seller’s lots that the bidder can bid on.
Step 3: During the first round of bidding in the trading event, each bidder enters a price they are willing to pay for each lot they would like to purchase. Prices must be no lower than the minimum prices in effect for the first round (i.e., the seller’s starting prices). The Trading Manager closes the first bidding round after a pre-specified period of time. Note that no lots are won after the round — or after any round until the last round of the trading event.
Step 4: For each successive bidding round, the minimum prices may be increased on some or all lots, and bidders submit new bid prices no lower than the minimum prices in effect in the round. (Minimum prices never decline round to round.) This continues for successive rounds until bidding stops on all lots. There is no pre-determined number of rounds. As long as at least one lot receives a new bid in a round, the trading event proceeds to the next round with all lots available for bidding. Lots do not close for bidding lot by lot: all lots are available simultaneously for bidding each round, even lots that have not received a new bid for several rounds.
Step 5: Shortly after the close of the trading event, each bidder still active in the trading event will be able to see on the Bidding Website the lots they have won and the winning prices. A bidder does not see the names of other bidders.
Step 6: Each winning bidder (customer) is contacted by a representative of the seller to execute the contract. Sellers and winning bidders arrange shipments to the customer’s destination.
Question: I understand that bidding occurs in a sequence of rounds. How many rounds will there be in a trading event? Before the last round of the trading event, if a lot does not receive new bids in a round does that mean no one can bid on that lot anymore?
Answer: There is no pre-determined number of rounds in a trading event. The last round of the trading event will be the first round in which there is no bidding activity on any lot. All lots are available for bidding simultaneously in each bidding round. Even if several rounds go by for which a particular lot does not receive new bids, bidders still can bid on that lot in any subsequent round. Bidders are not prevented from bidding on any lot — unless a seller indicated they do not want the bidder bidding on a particular lot — until the trading event is completed.
Question: What determines the increase in prices from one round to another?
Answer: Formulas based on a number of factors and pre-specified guidelines are used to determine the price increments from round to round. Generally, the price increment for a lot will be larger for the earlier rounds in the trading event and when the excess demand for the lot is greater. The Trading Manager reserves the right to override the price increment guidelines.
Question: What happens if I can't connect to the Bidding Website or if I have computer or Internet problems during the trading event?
Answer: Call the Trading Manager’s Help Desk immediately. The Trading Manager provides a Help Desk that can be used to submit bids over the phone if a bidder loses access to the Internet or experiences some other technical problem. All calls to the Help Desk are recorded.
Question: Can an individual buyer’s bids be seen by anyone else?
Answer: A bidder’s bids cannot be seen by other bidders. A seller can see the bids on its lots but not the names of bidders. The Trading Manager can see a bidder’s bids and the names of bidders.
Question: Will there be an opportunity for me to understand through a trial run how the process works ahead of my first trading event?
Answer: CRA, as Trading Manager, will run a mock trading event before the first trading event. Any bidder that feels they need additional training can contact us at NFXTradingManager@crai.com to arrange additional support.
Question: What is meant by standing high bidder, standing high bid, and minimum bid price?
Answer: The standing high bidder on a lot is the bidder who has submitted the highest price on the lot in the trading event. The standing high bid on a lot is that highest price. The minimum bid price on a lot in effect for a round is the lowest acceptable bid price for the lot; if a bidder tries to enter a bid price below that minimum bid price, it will be rejected. The minimum bid price for a lot is some increment above the standing high bid price for the lot. The standing high bidder, standing high bid, and minimum bid price for lots are not determined during a bidding round. They are determined once the bidding round has ended when all bids submitted and confirmed in the round are processed.
Question: When multiple bidders bid the same, highest price on the same lot, who will be the standing high bidder at the end of the bidding round?
Answer: A tie-breaking rule is used to determine the standing high bidder in this case. A random number is assigned to each bidder-lot (i.e., each lot that a bidder bids on is assigned its own random number). The random numbers are used to select the standing high bidder on a lot when two or more bidders submit the same, highest bid price on the lot.
Question: If I am the standing high bidder on a lot entering a round (i.e., I have the standing high bid for the lot entering the round), can I withdraw my standing high bid?
Answer: No, a standing high bidder cannot withdraw its standing high bid. All bids submitted and confirmed are binding obligations on the part of the bidder: if the bid submitted and confirmed by the bidder becomes the standing high bid, and should that standing high bid turn out to be the winning bid at the end of the trading event because no other bidder outbids it for the duration of the trading event, then that standing high bid becomes the winning bid and the bidder is the winning bidder and is obligated to pay the winning bid price.
Question: What is the point system and how does it work when there are multiple sellers in a trading event?
Answer: Prior to the trading event, each lot offered for sale by a seller in the trading event is assigned a number of “bidding points” or just “points”. The points are intended to be roughly proportional to the relative values of the lots in the trading event. (A lot that is expected to be worth twice as much as another lot will be assigned twice the points as the less valuable lot.)
Also, prior to the trading event, each seller informs the Trading Manager how many points the seller will allow each bidder to bid on for that seller’s lots. The number of points a seller assigns to a bidder is referred to as the seller’s “bid limit” for that bidder.
As an example, if the total points across all the seller’s lots is 100 points and the seller wants a bidder to be able to bid on all the seller’s lots, then the seller will assign a bid limit of 100 points (or higher) to the bidder. If the seller does not want the bidder to bid on any of the seller’s lots, then the bid limit would be zero points for the bidder. The seller could set a bid limit between zero and the total points across its lots. (Note that even if a seller assigns positive points to a bidder, the seller also has the option of specifying particular lots that it does not want the bidder to bid on.)
During the trading event, the lots that a bidder can bid on are restricted in three ways. First, as noted above, a seller can specify particular lots that it does not want the bidder to bid on. Second, a bidder cannot bid on a seller’s lots if the total points associated with those lots would exceed the bid limit that the seller assigned to the bidder. Finally, a bidder has “eligibility points” or just “eligibility” in effect for each round. A bidder cannot bid on lots in the round across all sellers if the total points associated with those lots would exceed the bidder’s eligibility in effect for the round. A bidder’s eligibility in effect for a round is the number of points associated with the lots the bidder was active on in the preceding round. (A bidder is active on a lot in a round if the bidder submits a new bid on the lot and/or is the standing high bidder on the lot entering the round.) Note that this rule means that a bidder’s eligibility cannot increase round to round; it can only stay the same or decline round to round.
Question: How is a bidder “active” on a lot?
Answer: A bidder is considered active on a lot as of the end of a bidding round if the bidder submitted and confirmed a new bid on the lot during the round and/or was the standing high bidder on the lot entering the round. Either way, the bidder is credited with the bidding points for that lot for the purpose of determining the bidder’s eligibility for the next round. Note that there is no double-counting of points on a lot: if a bidder was the standing high bidder entering the round and also submitted a new bid on the lot, if the lot is worth 10 points, the bidder is credited with only 10 points not 20 points for being active on the lot.
Question: If I am the standing high bidder on a lot entering a round, can I bid on the lot again? Do I have to bid on the lot again?
Answer: If you are the standing high bidder on a lot entering the round, you can bid on that lot during the round — but you do not need to bid on the lot in the round. As with any bidder bidding on the lot, if you bid on the lot in the round, you will need to bid a price that is no lower than the minimum price for the lot in effect for the round — which necessarily is higher than your standing high bid price in effect entering the round. Note that if you do not bid on the lot that you have the standing high bid on, and some other bidder does bid on the lot, then you no longer will be the standing high bidder on the lot entering the next round. But you will have the opportunity to bid on the lot again in the next round.
Question: What if I change my mind on a bid — can I submit a new bid?
Answer: A bidder can submit multiple bids during a bidding round. Each new submitted and confirmed bid replaces all prior bids the bidder submitted and confirmed during the round. The last bid processed for a bidder once the round closes is the last bid submitted and confirmed by the bidder in the round. Once the bidding round closes, the bidder cannot change its bid. The last bid submitted and confirmed by the bidder in the round is a binding obligation on the bidder.
Question: If I stop bidding on the trading event, will I be able to continue to participate in and observe the rest of the trading event?
Answer: No, if you stop bidding and if you have no standing high bids, you no longer will be active on any lots and your eligibility will be zero points. You no longer will be able to access the Bidding Website if your eligibility drops to zero points because there is no possibility that you could win any lots.
Question: If a bidder enters a bid price below the minimum required price for a lot, does the auction for this lot continue or is it immediately withdrawn as the bid does not meet the minimum required price?
Answer: If a bidder attempts to enter a price below the minimum required price for a lot, it will be rejected immediately and the bidder will be required to enter a valid price (or leave the entry box blank – i.e., not submit a bid on the lot).
Question: What do the column headings mean for lots displayed in tables?
Brand / Type / Grade & Production Date / Works – Farmers mark / Marketable description of wool / Date that slipe wool was processed / Fellmongery location
Bales – Number of bales in the lot
Nett kg – Weight of the bales less the weight of the wool pack
SD Clean % / 16% Conditioned (kg) – Measured in kg: Tested yield of the wool based on Schlumberger Dry Yield Test / Tested 16% Conditioned Weight
Price Bidding Basis – Selling price basis based on the tested weight or the untested nett weight
Min Price Round n – A bid price on the lot in round “n” must be no lower than this price
Col Y / Y-Z – Tested brightness of the wool / Tested colour of the wool
VM – Tested vegetable matter content in the wool
AIR/F – Tested micron (fibre diameter) of the wool
SD Clean % / 16% Scoured – Measured in %: Tested yield of the wool based on Schlumberger Dry Yield Test / Tested 16% Conditioned Weight
Barbe / Hauteur – Tested length of the wool
Delivery Period – Period when wool is available for collection by the buyer
Shipping Term / Store Location – Seller’s terms of sale / Collection point