What Is Stock Negotiation? Understanding the Negotiated Market and How to Trade It with KAF Sekuritas

In Indonesia’s capital market, trading is divided into several market segments. Each segment is governed by specific criteria set by the Indonesia Stock Exchange (IDX). These segments differ in trading purpose, unit size, price flexibility, and settlement mechanisms.

One of these segments is the negotiated market. Here, trading activities are often referred to as “stock negotiation” or negotiated trading. If you're a seasoned investor, this term is likely familiar to you.

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Characteristics of Stock Negotiation

Compared to the regular market, transactions in the negotiated market operate under a different mechanism. The negotiated market allows two investors to conduct direct buy-and-sell agreements through a bargaining process. This is different from the bid–offer order book used in the regular market.

Negotiated trades are executed based on mutual agreement between the buyer and the seller. These trades are not bound by price–fraction rules or auto-rejection limits. However, they remain fully supervised by the IDX and must be facilitated by a licensed securities company.

Flexibilities in Negotiated Trades

So, what are the flexibilities of negotiated trades that are not available in the regular market? Below are the key characteristics of negotiated trading as regulated under IDX Regulation No. II-A on Equity Securities Trading:

1. Transaction Size: Unlike regular-market transactions that use lot-based trading (1 lot = 100 shares), negotiated trades are executed per share. This gives investors the flexibility to buy or sell shares in any quantity without requiring multiples of 100.

   
   

2. Price Flexibility: Negotiated trades are exempt from price–fraction rules and auto-rejection limits. The minimum allowable price for a negotiated transaction can be as low as IDR 1.

   
   

3. Settlement Terms: Settlement does not need to follow the standard T+2 timeline. Instead, the terms are determined based on an agreement between the buyer and the seller.

   
   

Common Uses of the Negotiated Market

Investors typically use the negotiated market for:

• Large-volume transactions (block trades) requiring special price flexibility.

• Trades below IDR 50 or with non-round-lot quantities.

• Illiquid stocks with little to no activity in the regular-market order book.

• Securities listed on the Watchlist Board, which often require negotiated execution.

  
  

Negotiated Trading with KAF Sekuritas

At KAF Sekuritas, clients can execute negotiated trades by contacting the Customer Service team through the official WhatsApp channel. Clients will need to provide the stock code, negotiated price, and desired volume. After that, they will complete a physical form to proceed with the transaction.

Conclusion

In conclusion, the negotiated market offers unique advantages for investors looking for flexibility and tailored trading options. Whether you're handling large transactions or dealing with illiquid stocks, understanding this segment can enhance your trading strategy.

For more information about our services and how we can assist you in navigating the Indonesian capital market, feel free to reach out.

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Disclaimer: The content is made for educational purposes, not a recommendation to buy or sell a particular stock. PT KAF Sekuritas Indonesia is licensed and supervised by the Financial Services Authority (OJK).