|
|
Enron Mail |
October 4, 2000
Notice 00-344 Implied Bid or Offer Functionality Returns to NYMEX ACCESS Effective Sunday evening, October 8, 2000 (trade date October 9, 2000), the= =20 NYMEX ACCESS electronic trading system will begin offering implied trading= =20 functionality, pending approval of necessary rule changes by the Commodity= =20 Futures Trading Commission. This feature will once again create "implied"= =20 bids and offers in all futures, intra-market calendar spread, and 1:1=20 inter-commodity spread markets based on orders in related markets. Implied Orders in General Implied bids and offers are generated by the system based on individual=20 contract or spread orders that have been entered into the system. For=20 example, if someone places a spread order to buy heating oil and sell crude= =20 oil at a set differential, the system will automatically seek the best offe= r=20 to sell heating oil and the best bid on crude oil and create an implied bid= =20 in heating oil and an implied offer in crude oil, based on the differential= =20 to the other market. To do this, the system examines the outright orders= =20 (orders directly entered into the system) and creates bids and offers that= =20 are implied by the combination of specific outright orders. The system the= n=20 creates the "implied" bid or offer and displays it as an order that may be= =20 traded against. If a trader trades against this implied order, then the=20 outright orders that combined to create the implied order will trade. Two-Way Implication Between the Futures and the Spread Markets Orders entered into a commodity=01,s outright futures market will combine t= o=20 create implied spread orders both as calendar spreads and 1:1=20 inter-commodity spreads . The reverse is also true, i.e., orders entered= =20 into the calendar spread market or the 1:1 inter-commodity spread market ca= n=20 combine with other futures orders to create implied futures orders. Implied Spread Orders Generated from Other Spread Orders Implied spread orders can be created from the combination of other spread= =20 orders. For example, two separate calendar spread orders, one to buy a=20 January contract and sell a February contract, and another to buy a Februar= y=20 contract and sell a March contract, will create an implied order for a buy= =20 January/sell March spread. The system will also generate implied=20 inter-commodity spread orders from the combination of calendar spread order= s=20 and other inter-commodity spread orders, and it will generate implied=20 calendar spread orders from the combination of inter-commodity spread order= s=20 and other calendar spread orders. Implied Order Creation and the Depth-of-Market Implied orders will be displayed only if the implied order=01,s price is th= e=20 best price in the market. Consequently, a particular market=01,s best pric= e=20 volume may be composed of outright volume, implied volume, or a combination= =20 of outright and implied volume. The depth-of-market view of a contract wil= l =20 only show this combination of implied and outright volume at the contract= =01,s=20 BEST bid and offer prices. Implied orders with prices that are NOT at the= =20 best price for a contract will NOT show in the depth-of-market view. Please note that although the depth-of-market will not display volume from= =20 implied orders at prices other than the best, if a sweep order (an order to= =20 purchase a certain number of contracts within a predetermined price range) = is=20 entered with a price that would trade through the undisplayed implied orde= r,=20 the implied order will be filled. Color Scheme to Distinguish Between Outright and Implied Orders If the volume of the best bid or offer is due completely to outright orders= ,=20 then the color will be displayed in BLACK font. If the volume of the best= =20 bid or offer is due completely to implied orders, then the color will be= =20 displayed in RED font. If the volume of the best bid or offer is a=20 combination, then the color will be displayed in PURPLE font. (Warning: Do= =20 not change the Bid or Ask Color price cells -- which is done in the <View<= =20 <Preferences< <Attributes< screen --to the same colors that appear in the= =20 Implied Prices (Full) and (Part) fields -- also located in the same <View<= =20 <Preferences< <Attributes< screen. If you do, you will not be able to view= =20 the implied prices.) Cross Orders Must Be Turned Off The current version of the implied functionality requires that cross order= =20 entry be turned off. Therefore, there is no ability to directly enter a=20 cross order (a single order for a trade to be transacted for two customers= =20 accounts by the same broker) into the NYMEX ACCESSc system (This=20 functionality is planned as a future enhancement). Orders should be entere= d=20 in the order received from the customers. If you have two orders in hand= =20 that would normally be entered as a cross order, you should enter the order= =20 received first, wait ten seconds, and then enter the order received second. Options Orders This release does not support implied options orders in any options market. More Information If you have additional questions concerning the implied market functionalit= y,=20 please call the NYMEX ACCESSc Control Center (NACC) at 1-800-438-8616 US,= =20 0800-89-0813 (UK), or 212-299-2670 (Far East). The NACC can provide you wi= th=20 a more descriptive document concerning the implied functionality and answer= =20 any questions that you may have. __________________________________________________ Please click on the link below to indicate you have received this email. "http://208.206.41.61/email/email_log.cfm?useremail=3Dtana.jones@enron.com&= refdo c=3D(00-344)" Note: If you click on the above line and nothing happens, please copy the text between the quotes, open your internet browser, paste it into the web site address and press Return.
|