ECHOpro Smart-Swipe

 

IMPORTANT NOTE:

Use of this feature is at your own risk only – no financial responsibility will be taken for malfunction of the system.

 

ECHOtrade is pleased to announce that a Smart Swipe function (SWIPE) has been implemented in the ECHOpro system. This feature will allow traders, with the push of a button, to send orders to selected destinations for quick execution within a specified price tolerance. The following concepts have been implemented to support the SWIPE function:

 

1) Thru-Price Delta – this is a price variance, which in conjunction with the best bid or offer will yield the Thru-Price, or the price of the highest tolerance the trader is willing to buy or sell the stock. For instance, if the best offer is currently at $25.67 and your Thru-Price Delta is $0.02 then your highest bid for the stock should not exceed $25.69 (25.67 +

0.02). The Thru-Price Delta may be set to zero, in which case your Thru-Price will be

equal to the current best bid or offer. Finally, the Thru-Price Delta may be set to the

special designation of <No-Delta>, which will result in the Thru-Price becoming

dynamic and equal to the best bid or offer as quoted by the execution destinations

specified on your list at the time of the SWIPE process.

 

2) Thru-Price – this is the highest tolerance price point, at which you’re willing to buy or sell the stock. The general formula for the Thru-Price is: Current Best Bid less Thru-Price Delta if you are selling; or Current Best Offer plus Thru-Price Delta if you’re buying.

 

3) SWIPE Execution Destinations – this is a list of execution destinations (exchanges,

ECNs, or brokers) to which you want to send SWIPE orders. In order for the execution

destination to be considered suitable for SWIPE it needs to be quoted, or present in the

Level-2 display. An execution destination must also be accessible, i.e., there is an

electronic link through which ECHOpro system can send orders to the destination.

 

4) Execution Destination Ranking – the execution destinations used for SWIPE should be ranked or assigned sending priority. This ranking is established by the order in which the executions are entered into the ECHOpro system by the trader using the front-end software.  The ranking is used when there are two or more destinations that are quoting the same price at the time the SWIPE function is performed. The highest rank will determine where the order will be sent.  Once the trader establishes the Thru-Price Delta and has a list of Execution Destinations defined in the ECHOpro software, he’s ready to send SWIPE orders. Because the SWIPE function may not be suitable for all trading styles, ECHOtrade’s Risk Manager needs to enable traders before they can use it.  Request this feature by sending an email to support@echotradeonline.com.

 

When using the SWIPE function the following should also be considered:

 

1) Traders can enter a SWIPE order from either the Level-1 or Level-2 Order Entry

window. The Destination Field should be set to SWIPE and the Price Field should

contain the value of the Thru-Price Delta. The <No-Delta> special selection is available

in the pull-down menu of the Price Field.

 

2) The SWIPE orders can also be entered using the Hot Keys. When setting a hot key the

destination must be SWIPE and price should contain the Thru-Price Delta value.

 

3) All SWIPE orders are sent to the execution destinations as IOC (Immediate-or-Cancel).

 

4) A new Hot Key labeled “Cxl Smart Swipe” has been added to allow for cancellation of

all SWIPE functions in progress.

 

5) The existing “Cxl All Orders” hot key will affect SWIPE orders, as well.

 

6) An optional pop-up notification window will be displayed when the SWIPE process is

completed. The pop-up window setting is located in the “Global Order Entry” settings

under the “Misc” tab.

 

7) The Thru-Price is computed based on the NBBO with exception of the <No-Delta>

selection.

 

8) The SWIPE process is concluded when one of the following conditions occur:

a) SWIPE order is fully filled

b) SWIPE process is manually cancelled using the “Cxl Smart Swipe” hot key

c) SWIPE cycle does not yield an order to be sent to any of the execution

destinations – all destinations are quoting the stock outside of the Thru-Price or

they don’t post their quotes at all.

 

9) The Thru-Price is computed once at the time of initial request to start the SWIPE process from the Level-1 or Level-2 order entry window. The exception to this is when the <No-Delta> designation is used, which indicates dynamic Thru-Price settings.

 

Usage example: Smart Swipe Order Entry (SWIPE):

 

  1. IBM is currently offered at 76.25 on NBBO.

 

  1. Your designated SWIPE execution destinations are ARCA, INET, NYSE, AMEX, and BRUT, in that order of ranking.

 

  1. You want to buy 1000 shares of IBM at the Best Offer with a Thru-Price Delta of 0.04. Your Thru-Price will be 76.29, which is the product of the Best Offer plus the Thru-Price Delta.  You set the execution destination field to ‘SWIPE’, your Price Field to 0.04 and send the order. You send the Smart Swipe order by using a Hot Key, or by clicking the ‘Buy’ button.

 

  1. You receive an execution report for 200 shares @ 76.27 from ARCA. The remainder of 800 shares is immediately canceled (IOC order). The Smart Swipe process continues. Next, the remainder or ‘Lvs Qty’ of 800 shares from the initial order gets “swiped” again at the top of the Level II just as before. Looking again for the best available offer price as quoted by the execution destination, a new order is sent to one of the destinations from the Smart Swipe list that is quoting the best offer price within the Thru-Price limit. This destination could still be

ARCA, or it could be INET, or one of the other of the listed destinations, so long as they all have the best offer price currently quoted.

 

  1. INET fills an additional 400 shares (partial fill) at the selected Thru-Price or better, and then the remainder of 400 is immediately canceled. The SWIPE process is repeated, until either the order is filled in its entirety or the best offer price as quoted by the execution destinations moves outside of the Thru-Price level set by the trader.