Central Order Book – Order Initiation

Short description

Order initiation via generic limit order; order book analysis.
This simulation mimics the fundamentals of the trading environment and market activity. Focus is only on relevant aspects so that you cannot be distracted by (currently) irrelevant aspects. The modular setup of this simulation allows therefore for gradually grasping one concept or process after another, making it very suitable for non-traders. Actually, it is suitable for all professionals with a role in (or relating to) the wholesale commodity or energy markets. It is very suitable for non-traders as terminology is covered on the go, thereby intuitively embedding concepts and processes.

Capacity

You act in the role of a market participant.
More specifically, you act in the capacity of initiator.

Task

Place an order (to buy or to sell) in the order book which is not directly executed. Hence, it should underperform the actual best bid/offer. Then, watch the order to appear in the order book as ‘pending’ (if it fits the first few lines of market depth; else, it is pending in the order book, but you may not be able to see it (yet)) and identify this order at “My Orders”. You can await the order to be executed (no guarantee, but only if the market moves in the right direction), or cancel it beforehand. In case of execution, watch the deal to appear in the transaction log.

Next, you could (try to) place a limit order that outperforms the best bid/offer so far. This will decrease the bid-ask spread. The order has a high chance to be executed (relatively fast).

Objective

The aim of this simulation is to master placing an order in the order book, including those with an ‘off-market’ price. Moreover, a stack of orders can be placed, either on one side of the order book, or on both sides.

 

Our Labels

Entrima and Market Abuse Centre (MAC) are the two labels we operate to provide learning services for professionals in the commodity & energy markets.
 
 


Content & Context

Entrima’s mission is to transfer knowledge regarding the business, controls & operations of parties in (or relating to) the wholesale markets.

www.entrima.org


Conduct & Culture

MAC’s mission is to facilitate the prevention & detection of misconduct and to foster proper behaviour in organisations. This is achieved via training, periodic updates and increased awareness.

www.marketabusecentre.com