Order Matching Rules
Order Matching takes place after order acceptance wherein the system searches for an opposite matching order. If a match is found, a trade is generated. The order against which the trade has been generated is removed from the system. In case the order is not exhausted further matching orders are searched for and trades generated till the order gets exhausted or no more match-able orders are found. If the order is not entirely exhausted, the system retains the order in the pending order book. Matching of the orders is in the priority of price and timestamp. A unique trade-id is generated for each trade and the entire information of the trade is sent to the relevant Members.
The derivatives market is order driven i.e. the traders can place only orders in the system. Following are the order types allowed for the derivative products. These order types have characteristics similar to the ones in the cash market.
- Limit Order: An order for buying or selling at a limit price
or better, if possible. Any unexecuted portion of the order
remains as a pending order till it is matched or its duration
- Market Order: An order for buying or selling at the best price
prevailing in the market at the time of submission of the order.
- Stop Loss: An order that becomes a limit order only when the
market trades at a specified price.
All orders have the following attributes:
- Order Type (Limit / Market PF/Market PC/ Stop Loss)
- Asset Code, Product Type, Maturity, Call/Put and Strike Price
- Buy/Sell Indicator
- Order Quantity
- Client Type (Propritory / Institutional / Normal)
- Client Code
- Order Retention Type (GFD / GTD / GTC)
Good For Day (GFD) - The lifetime of the order is that trading session
Good Till Date (GTD) - The life of the order is till the number of days as specified by the Order Retention Period.
Good Till Cancelled (GTC) - The order if not traded will remain in the system till it is cancelled or the series expires, whichever is earlier.
- Order Retention Period (in calendar days) : This field is enabled only if the value of the previous attribute is GTD. It specifies the number of days the order is to be retained.
- Protection Points Protection Points : This is a field relevant in Market Orders and Stop Loss orders. The value enterable will be in absolute underlying points and specifies the band from the touchline price or the trigger price within which the market order or the stop loss order respectively can be traded.
- Risk Reducing Orders (Y/N): When a Member's collateral falls below 50 lacs, he will be allowed to put only risk reducing orders and will not be allowed to take any fresh positions. It is not essentially a type of order but a mode into which the Member is put into when he violates his collateral limit. A Member who has entered the risk-reducing mode will be allowed to put only one risk reducing order at a time.