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Trading And Orders Essay

678 words - 3 pages

Trading Mechanism

Overview

Trading Processes

With HKATS, orders are placed electronically into the Central Orderbook . The system automatically matches the corresponding buy or sell orders in real-time based on price/time priority. The executed trade is reported back to the Trader who can then confirm the trade immediately with his client. At the same time, the trade information, depending on what product the trade relates, is transmitted to the HKFE Clearing Corporation Ltd (HKCC) or The SEHK Options Clearing House Ltd (SEOCH) where appropriate for registration and clearing.

The process is expressed diagrammatically as follows:

|1 Client places order with |2 Trader enters ...view middle of the document...

An auction order is an order to buy or sell in the market at the COP. All auction orders will be displayed and matched on a time priority basis. Unmatched auction orders are converted to limit orders on the market open.

2. Limit Orders
Limit orders will be matched automatically by HKATS if the COP is at the limit price or better. Limit orders with a bid that is higher than the COP or an ask price that is lower than the COP will be displayed at the COP. Any unmatched limit orders entered during the pre-opening period will remain as limit orders after the market open.

3. Inactive Orders
Users can also enter inactive orders in HKATS during the pre-market opening and they have the option of activating these orders later.

Order Amendment and Cancellation

Orders resident in the Central Orderbook may be amended, cancelled or inactivated only during the period of 30 minutes before the opening of each trading session or during trading hours. During the period of 30 minutes before the opening of a trading session, users can modify information of the orders, change the duration of validity and reduce the quantity of the order. Such actions will not affect the time priority of valid orders. However, any attempt to amend the order price or increase the order quantity during the period of 30 minutes before the opening of a trading session may result in the cancellation...

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