[This message was posted by Ryan Pierce (FPL Technical Director) of FIX Protocol Ltd. <[email protected]> to the "General Q/A" discussion forum at http://fixprotocol.org/discuss/22. You can reply to it on-line at http://fixprotocol.org/discuss/read/13e8a9f5 - PLEASE DO NOT REPLY BY MAIL.]
> If he obtains agreement from both, he will effect the trade. That might not necessarily be possible. In addition to consent from the parties, as Hanno said, the Cross order may be submitted to an exchange, whose rules may apply and may affect how, or if, the cross is executed. It is possible that a cross could be declined by the exchange. It is also possible that the exchange could step into the middle of the proposed cross and trade some or all of one side, and leave the remainder of the other leg on the book, or cancel it. A cross may also involve an agreed trade between the broker's own proprietary inventory and the client. E.g. the book may appear as follows: Bid Offer 1000 @ $10.25 1000 @ $10.26 1000 @ $10.24 2000 @ $10.27 1000 @ $10.23 1000 $ $10.28 A client may want to buy a block of 100,000 shares, and may agree to do it with the broker at $10.27, which is outside the NBBO, but is still reasonable, especially considering the volume involved and its market impact. So the broker may send a cross for 100,000 shares at $10.27 to the exchange. The exchange may respond by matching 1000 shares @ $10.26 and 2000 shares @ $10.27 from the book with the client leg to buy, and then matching the remaining 97,000 shares of the client leg to buy with 97,000 of the broker's leg to sell at $10.27, and then canceling out the rest of the broker's leg to sell. [You can unsubscribe from this discussion group by sending a message to mailto:[email protected]] --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Financial Information eXchange" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/FIX-Protocol?hl=en -~----------~----~----~----~------~----~------~--~---
