Future Option Trading System

PLACING ORDERS ON THE TRADING SYSTEM

For both the futures and the options market, while entering orders on the trading system, members are required to identify orders as being proprietary or client orders. Proprietary orders should be identified as ‘pro’ and those of clients should be identified as ‘cli’. Apart from this, in the case of ‘c li’ trades, the client account number should also be provided.

The futures market is a zero sum game i.e., the total number of long in any contract always equals the total number of short in any contract. The total number of outstanding contracts (long/short) at any point in time is called the “open interest”. This open interest figure is a good indicator of the liquidity in every contract. Based on studies carried out in international exchanges, it is found that open interest is maximum in near month expiry contracts.

MARKET SPREAD/COMRINATION ORDER ENTRY

The NEAT F&O trading system also enables to enter spread/combination trades. This enables the user to input two or three orders simultaneously into the market. These orders will have the condition attached to it that unless and until the whole batch of orders finds a counter match, they shall not be traded. This facilitates spread and combination trading strategies with minimum price risk.

DASKET TRADING

In order to provide a facility for easy arbitrage between futures and cash markets, NSE introduced basket trading facility. This enables the generation of portfolio offline order files in the derivatives trading system and its execution in the cash segment. A trading member can determines its size. The system automatically works out the quantity of each security to be bought or sold in proportion to their weights in the portfolio.

 

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