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 governed by specific criteria set by the Indonesia Stock Exchange (IDX). These segments differ in terms of trading purpose, trading unit, price flexibility, and settlement mechanism.

One of these segments is the negotiated market, where trading activities are commonly referred to as “stock negotiation” or negotiated trading. For seasoned investors, this term is certainly familiar.

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Characteristics of Stock Negotiation

Compared with the regular market, transactions in the negotiated market operate under a different mechanism. The negotiated market allows two investors to conduct a direct, individual buy-and-sell agreement through a bargaining process rather than through the bid–offer order book.

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, although they remain fully supervised by the IDX and must be facilitated by a licensed securities company.

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. Trading Unit

While regular-market transactions 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 & Settlement

As stated earlier, 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.

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

3. Purpose of Use

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, and

• 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 be asked to provide the stock code, negotiated price, and desired volume, followed by completing a physical form to proceed with the transaction.

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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).