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Re: Cross Order.
Hanno Klein / Deutsche Börse Systems <>
12 May 2009 3:12AM ET
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).
> 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.
Hanno Klein / Deutsche Börse Systems 12 May 2009 3:12AM 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