Order Driven Execution Going Live
Order Driven Execution will launch for Saxo’s retail customers on 15 November, 2016 in SaxoTraderGO and on 17 November, 2016 in SaxoTrader. The demo environment will display such changes on 2 November. For your branded platforms, the implementation is in the week of 21 November. The corresponding branded demo environments will be updated on 14 November.
Notable changes include:
- FX spot and FX Forward execution defaults to a Limit IOC (Immediate-or-Cancel) order, providing traders with greater control over the way orders are traded through a pre-defined Price Tolerance
- Price Tolerance on a Limit IOC order defines the minimum (when selling) price differential or maximum (when buying) price differential that a trader is comfortable accepting. For FX spot and FX Forwards, the default is set to 0.01% of the spot price for all currency pairs, but it is configurable on the individual currency pair level
- To extend the breadth of FX liquidity available to traders, Saxo will be able to connect to a broader set of market venues that typically only operate under an Order Driven Model. This means that it will be quicker and easier to get orders into these venues
- Introduction of partial fills for FX spot and FX Forwards
- Execution in all other product types defaults to a Resting Market order and traders may experience positive or negative price movements. Resting orders may further be subject to partial fills
- Change to the colour of the trade tiles
The new Price Tolerance feature provides an effective way to mitigate risk of unexpected volatility. Limit IOC orders will only be executed if a price can be obtained within a trader’s predefined price range, with any execution price improvements passed on to the trader.
The Price Tolerance feature is applied by default for FX spot and FX Forwards, but can also be applied when trading CFDs, Futures, Futures Spreads, Stocks and ETFs.
This feature allows traders to define a price range where they are comfortable with the order being executed. Depending on the instrument, Price Tolerance is expressed as a distance in pips, ticks or percentage points.
As seen below, by removing Price Tolerance, the Trade Ticket will convert the order type to a Market IOC order for FX spot and FX Forwards, and a Resting Market order for all other product types.
Potential price improvements
With our Order Driven Execution, traded instruments are subject to price movements. Price movements – either positive or negative – are always passed on to the trader as and when they occur.
If the price moves against a trader, the specified price tolerance ensures that the order is only executed if it is within the predefined price range. There is, however, no guarantee that orders can be fully or partially executed within the specified tolerance.
See examples of Price Tolerance and price improvements, and learn more about Order Driven Execution here.
On our Institutional Marketing Portal, you can find a communication package for Order Driven Execution, which you can use to prepare documentation for your customers.
The email communication Saxo sent last week to direct retail customers and IB end-clients is here for your reference.
If you have any questions, please contact your Account Manager.