Hello Guys,
Again let me take an example of buying Apple iPhone through Amazon Marketplace. Once the Order is placed the Amazon will create an Order Ticket that will have below information,
- PRODUCT Details
- Date & Time of the Transaction
- Price Details
- Quantity
- Is it a BUY or Sell?
- The Executive from Amazon who handles this order.
- Customer Name
- Seller Details
- Expected Delivery Dates
- Updates to the Order if any
Just apply the same logic to Trade Attributes.
Let’s take this example – Bank of Moon (:p) buying 20M valued Equities from Bank of Venus, this trade is placed in the National Stock Exchange India. This is high-level information about the trade, let us break it down.
Nature of the Trade
Is the Trade between counterparties are
- Buying or Selling the Shares of one counterparty to another eventually the buyer of the Shares will get the dividend and Seller will increase his Capital to do the business – EQUITY
- Buying or Selling the assets at the fixed price with some floating or fixed interest as the payout to the buyer of the BOND – FIXED INCOME
- Buying and Selling the Currency – FOREX Trading
This we call as TRADE TYPE – FXSPOT, FORWARDS, NON DELIVERED FORWARDS are some of it. I will explain each Trade Type in upcoming Posts.
Mandatory Information about the Trade
Every department in the Trade Life Cycle requires information till the Trade Settles.
- Trade Identifier that was created by Banks internal process per department. This values should be unique.
- Trade Type – FXSpot
- Trade Date
- Execution Time
- Executed at – Location
Financial Information about the Trade
- PRICE of the Trade
- Buy or Sell
- Product details (USDINR)
- Under & Accounting Currency details
- Notional of the Trade (Size of the Trade)
Booking Information if the Trade
- Who is booking the Trade is it SALESPERSON or the EXECUTING TRADER?
- Each bank has its own designated area (DESK) to execute the Trade for each Asset Classes
- BOOK – A trader can trade a Book which is nothing but Record of All Positions held by the Trader.
- Trader’s information – Trade Name / Location etc.,
COUNTERPARTY INFORMATION of the TRADE
- Counterparty name
- Counterparty Location
- Settlement Type of Counterparty
- Settlement Date
In my next post, I will try to explain multiple Date analogies in the Trading world.
Thanks for reading – please comment and or share it with your friends if you like.
Happy Reading – Asik
