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General Q/A
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Re: Cross Order.
Scott Atwell / American Century Investments <>
12 May 2009 8:49AM ET Girish,
I believe Hanno's definition of a "Cross Order" is correct (a single firm's desire to cross two sides of their own order), and that what you are describing is a "crossing facility" (or "internalization"). I would expect users of such would simply send New Order - Single messages for their individual orders (and may designate that they want to access or participate in the crossing service via attributes on the New Order Single message).
> > Hanno,
>
> Cross trade doesnot only refer to the trade which are subimitted by
> single buy side, the orders will come from different buyside side firm
> and then it get internally matched with the sell side hub, if this
> matched then the trade will get executed with out reporting to exchange.
>
> For example, If A,B,C,D are the buy side firm using E as their sellside
> firm for executing the orders then A may send a buy order which matches
> with the sell order of B, so in this phase the E sellside broker matches
> this order internally and send the ER to both the counter parties.
>
> Regards, Girish
>
> I have a different view and would call what you describe
> > "internalization". The definition you give is confusing for me as it
> > does not seem to fit with the way it is used by FIX. I thought that
> > cross trades were when both sides of a trade come from a single
> > submitter. That would only fit if the sellside internally "matches"
> > two orders and then sends both sides to an exchange for execution. In
> > this case the sellside is the single submitter.
> >
> > FIX provides messages NewOrderSingle and NewOrderCross and I see the
> > difference on the input side (providing one or two sides) and not on
> > the execution side (match internally or forward to an exchange).
> >
> > NewOrderCross allows to send in both sides within a single message,
> > i.e. you provide a potential match. Regulatory rules for exchanges
> > might require the exchange to make this public before executing it so
> > that others can step in. If nobody steps in (no other qualifying
> > orders), the cross can be executed as provided. Wouldn't the buyside
> > typically only send in one side (using NewOrderSingle), asking the
> > sellside to look for the best execution? In that sense, the buyside
> > cannot "send in a cross trade", it can only send in an order and it is
> > the sellside that makes this into a cross trade when it comes up with
> > the other side (and sends this to an exchange).
> >
> > Regards, Hanno.
> >
> > >Guys,
> > >
> > > Just to simplfy the answer, Cross trade means, it is the trade which
> > > is sent by buyside to the sellside were the sellside will try to
> > > match the order internally with in their inventory and if the order
> > > matches then he will execute this internally and will not send to
> > > exchange. In other case if the order parameter are not matching with
> > > the internal orders then the sellside firm will send the order to
> > > exchange.
> > >
> > > Correct me if i am wrong.
> > >
> > > Regards, Girish
> > >
Cross Order. Sridhar Satyanarayan / Deutsche Bank, India 6 May 2009 8:52AM ET Re: Cross Order. John Harris / BondMart Technologies, Inc. 6 May 2009 10:42AM ET Re: Cross Order. Ryan Pierce (FPL Technical Director) / FIX Protocol Ltd. 6 May 2009 12:42PM ET Re: Cross Order.
Scott Atwell / American Century Investments 12 May 2009 8:49AM ET Re: Cross Order. Jay De Young / Chicago Mercantile Exchange 12 May 2009 9:33AM ET Re: Cross Order. John Harris / BondMart Technologies, Inc. 12 May 2009 9:34AM ET
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