Tailor-made Combinations -

user-defined combination orders with central system execution

This Solution Helps

  • Traders
explore

The Tailor-Made Combination (TMC) functionality supports the creation of user-defined combination order books in the central system. It enables market participants to place working good-for-day multi-leg orders that, when matched at the given net price, trades all the legs simultaneously without any execution risk.

Once created intraday, the TMC is visible to the entire market and lives throughout the trading day. Working TMC orders are ranked and matched as normal outrights orders according to 1) price and 2) time.

As with pre-defined combination order books like the OMXS30 futures roll, matching of a TMC order can be performed within the combination order book, and also against outright orders and quotes. In order to maximize the probability of execution, the central system generates implied orders (a.k.a. derived orders) for the component legs of a TMC.

No Execution Risk

When you trade strategies via tailor-made combinations all included instruments in the specified strategy are executed simultaneously on a net price and without execution risk.

Combination Order Book

When a TMC is created, a combination order book is instantly created and is visible to the entire market.

Easy to Use

You create a TMC by defining what instruments you want to buy and sell - and the ratio between them. Specify the number of contracts and the net price to enter it in the electronic order book.

Implied-in Orders

Implied-in prices are automatically calculated by the system but are not published. When a TMC is entered, the central system tries to match that order with the implied-in prices from the outright order books.

Price

The Price for the Order shall be stated as a common net price, i.e. the premium times the ratio for the instrument to be bought minus the premium times the ratio for the instrument to be sold. The tick-size is 0.01.

Instruments

A TMC can consist of up to four instruments within the same underlying of equity derivatives. The instruments in a TMC need to have the same contract size (multiplier). Index futures are not valid instruments in a TMC. It is possible to have a relative ratio of up to 2:1 between the included instruments.

Implied-out Orders

Implied-out orders are orders automatically generated by the system. When a TMC is entered, the central system tries to match that order with any existing orders for that combination and also against the outright order books.

For each outright order book, and where possible, the system uses the market prices in all other included instruments to calculate an order with a theoretical price needed to trade at, in order to execute the whole combination at the set net price.

This order will be placed into the market as an implied-out order. If this implied-out order is traded, the system will simultaneously trade against the orders in all other instruments, with no execution risk. Implied-out orders are always calculated but only published in instruments where the ratio is 1.

Tailor-made Combinations

Resource Center

Related Information

Envision a Future – Fueled by Innovation, Technology and Expertise.
Now, let’s get there. Select below.