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Chapter 3 Order and Trade Management
After reading this chapter, you should be able:
1. To identify the various market types in the capital market segment.
2. To understand the legal technicalities in order modification and cancellation.
3. To differentiate between trade and order management.
4. To apply the knowledge of order matching in the real life trading situation.
Your guide engine to learning:
3.2 Order Management
3.2.1 Entering Orders
126.96.36.199 Order Types and Conditions
3.2.2 Order Modification
3.2.3 Order Cancellation
3.2.4 Order Matching
3.3 Trade Management
3.3.1 Trade Modification
3.3.2 Trade Cancellation
3.5 Limited Physical Market
3.6 RETDEBT Market (RDM)
We have already learned in the previous chapters about the NEAT system and the various types of functions available on the same. The NEAT system is a user friendly system which has come to the rescue of the innocent investors who were earlier dependent on the brokers and other mediators to know the prices of the securities they were holding. The NEAT system provides a range of functions which helps even a layman to understand the market in depth. The following chapter will help us in understanding how one can put orders in the system and manage the same. We will also discuss the auction market in detail. There is a passing reference of limited physical market and retail debt market.
3.2 Order Management
Order Management consists of entering orders, order modification, order cancellation and order matching.
3.2.1 Entering Orders
The trading member can enter orders in the normal market, odd lot, RETDEBT and auction market. A user can place orders in any of the above mentioned markets by invoking the respective order entry screens. When the user invokes the order entry screen, the fields that are taken as default are Symbol, Series and Book Type. In case of other fields, the system takes the following defaults:
- Symbol – Shows the symbol of the scrip.
- Series – Shows the series of the security, i.e. EQ or BE etc.
- Total Quantity – Here the user has to specify the quantity to bebought/sell.
- Price – The price at which the shares are to be bought is to be specified.
- Pro/Cli – Here the user has to select whether the shares are to be bought in the Proprietor’s account or in Client’s account.
- Client – If the shares are to be bought in client’s account, the client code has to be specified.
- Disclose quantity (DQ) – The user can disclose a minimum of 10% of the buy/sell quantity. If nothing is mentioned in the disclose quantity box then the entire buy/sell quantity is disclosed in the market i.e. all the users in the market can see the total quantity for which the order has been entered.
- Validity - The user has to choose the validity period from the drop down menu i.e., DAY (the order will be valid till the end of current day) and IOC (Immediate or Cancel – Either the order gets executed immediately or gets cancelled).
- Submission of Order – After entering relevant data in all fields press “Enter and Ctrl” key to submit the order. As the order placed the message comes with Time, Order No, Symbol, Series, Quantity, Rate, Member ID, User ID with last word CONFIRMED.
The Exchange has implemented index-based market-wide circuit breakers in compulsory rolling settlement with effect from July 02, 2001. In addition to the circuit breakers, price bands are also applicable on individual securities. Index-based Market-wide Circuit Breakers
The index-based market-wide circuit breaker system applies at 3 stages of the index movement, either way viz. at 10%, 15% and 20%. These circuit breakers when triggered bring about a coordinated
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