Sendero de Las Mesitas

As has been explained above, a member has various options regarding the type of order he wants to place. When an order is received it is given a unique number and a unique time stamp. In case, an order could not be matched, then they are stored in a different book in price – time priority in the following sequence.

•

Best price

•

Within price, by time priority.

Thus when two orders are entered at the same time the one with a better price gets priority. Similarly, incase two orders were entered at the same price; the one which was entered earlier gets priority.

The following types of books are maintained in the Capital Market

i.

Regular Lot Book – This book contains only regular lot orders and order do not have any of

the following attributes attached to them.

•

All or Non (AON)

•

Minimum fill (MF)

•

Stop Loss (SL)

iii. Stop-Loss Book –



Stop loss orders are stored in this book till the trigger price is reached or surpassed.



When the trigger price is reached or surpassed, the order is released in the regular lot book.



The stop loss conditions are met under the following circumstances.

•

Buy order – a buy order in the stop loss book gets triggered when the last traded price in the

normal market reaches or exceeds the trigger price of the order.

•

Sell order – a sell order in a stop loss book gets triggered when the last traded prices in the

regular market reaches or falls below the trigger price of the order.

iv.

Odd Lot Book – The odd lot book contains all orders with lot size lesser than the marketable

lot.

v.

Spot Book – The spot book contains all orders having different settlement periods only. The

system attempts to match an active spot order with a passive spot order in the book.

vi.

Auction Book – Auction Book contains orders that are entered for all auctions. ORDER MATCHING RULES

(i) The best buy-order is matched with the best sell order.

(ii) It is obvious that a seller would like to sell at the highest available price. (iii) Thus, the best buy-order is the one with the highest price.

(iv) At the same time, a buyer would like to buy at the lowest available price. (v) Thus the best sell-order is the one with the lowest price.

(vi) Thus the trading system tries to find for the seller the best possible buying price and the best possible selling price for the buyer.

Order Matching Rule

Buy Sell

Qty Price Qty Price

500 38.90 200 39

400 38 500 40

100 37 700 41

1000 36 200 41.50

300 35.50 1000 42

Best price (Buy) highest Best sell (lowest price)

(vii) Orders that match with other orders are called ‘active’ orders while those, which do not match, are called ‘passive’ orders.

(viii) The system always matches orders with passive orders in order to clear earlier orders on priority basis.

Order conditions : The order matching conditions fall into three categories

i. Time Related conditions ii. Price related conditions iii. Quantity related conditions

i. Time Related Conditions

a.

Day order – A day order is valid only for the day on which it is entered. It gets automatically

cancelled if not matched by the end of the day.

b.

Good till cancelled order – A GTC order remains in the system until it is cancelled by the

trading member. The maximum number of days for which a GTC order is valid is notified by the concerned stock exchange.

d.

Immediate or Cancel orders (IOC) – An IOC order allows a member to buy or sell a security

as soon as the order is released into the system, failing which the order is cancelled. If it is partially matched remaining quantity is automatically cancelled.

ii. Price Related Conditions

a.

Limit Price order – An order where the trader specifies his offer price is called a limit price

order.

Buyer – Max price upto which he is willing to pay. Seller – Minimum price is which he ready to sell.

b.

Market price order – An order t buy and sell securities at the best market price at the time of

placing the order.

c.

Stop loss price order – Stop loss price orders get activated when the market price reaches or

crosses a threshold price specified in the order (refer stop loss book).

iii. Quantity Related conditions

a.

Disclosed Quantity Order (DQ) – A DQ order allows a trading member to disclose only part

of the order quantity to be displayed. For example in a buy order for 500 units only 100 units will be disclosed, when these are purchased the buy order for the next 100 units are disclosed to the market.

b.

Minimum fill orders (MF) – Minimum fill orders allow the members to specify the minimum

quantity by which an order should be filled.

c.

All or None order (AON) – All or none orders allow the members. Put the order into market

with the condition that only whole quantity should be matched.

d.

Short Sell – The seller sells the shares even if he doesn’t own then. These are speculative

order (for bear). In this case, the orderer anticipates a decline in the price of shares. However, it is risky as he has to square up the transaction within the day.

In document DETERMINACIÓN DE LA CAPACIDAD DE CARGA ACEPTABLE DEL PARQUE ARQUEOLOGICO SAN AGUSTIN, HUILA (página 25-29)