Indicative Quote System

The Indicative Quote System (IQs) is a service that allows trading members to enter quotes into the indicative order book and subsequently execute trades on the basis of those quotes in low-liquid derivatives.

Benefits of IQs

  • No initial margin is required to enter an indicative quote: margin check is realized before trade execution.
  • Minimizing execution risk for market makers: the maker* may opt to reject the trade.
  • A wider range of trading strategies: participants may implement trading strategies simultaneously across many low-liquid instruments.

* "Maker" means the party of a trade whose quote number in the Quote Register is lower that the number of the counter quote.
 "Taker" means the party of a trade whose quote number in the Quote Register is higher that the number of the counter quote.

Indicative order book vs. main order book

    Main order book Indicative order book
Differences What is entered? Order Indicative quote
Margin check At order entry Not applied at quote entry
(but occurs before trade execution in the main order book)
Option to reject the trade No Yes
(for makers)
Data protocols
  1. Plaza2
  2. FAST
  3. FIX
  4. TWIME
  1. Plaza2
  2. FAST
  3. FIX
  4. TWIME
Common Order book mechanism Order-driven trading
Usernames to connect Same for both order books

 IQs algorithm

 

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