Customer X has placed a market order to sell 250,000 shares of Stock XYZ.
Assume that the prevailing best bid price of the stock is HK$16.00, and the price spread is HK$0.02.
Under the condition that the Bank will match the market order up to a maximum of 4 spreads from the prevailing best bid price, the Bank will only execute the order when the price is HK$15.92 or above.
|
BID
|
QTY
|
Trade Executed (Sell)
|
|---|---|---|
| $16.00 | 100,000 | 100,000 shares @ HK$16.00 |
| $15.98 | 50,000 | 50,000 shares @ HK$15.98 |
| $15.96 | 0 | 0 shares @ HK$15.96 |
| $15.94 | 54,000 | 54,000shares @ HK$15.94 |
| $15.92 | 46,000 | 46,000 shares @ HK$15.92 |
| $15.90 | 4,000 | Total: 250,000 shares |
| $15.88 | 0 |
The Market Order is fully executed by selling all 250,000 shares after matching with the five best price queues in the prevailing market condition.
|
BID
|
QTY
|
Trade Executed (Sell)
|
|---|---|---|
| $16.00 | 40,000 | 40,000 shares @ HK$16.00 |
| $15.98 | 35,000 | 35,000 shares @ HK$15.98 |
| $15.96 | 10,000 | 10,000 shares @ HK$15.96 |
| $15.94 | 10,000 | 10,000 shares @ HK$15.94 |
| $15.92 | 0 | 0 shares @ HK$15.92 |
| $15.90 | 1,000 | Total: 95,000 shares |
| $15.88 | 0 |
Execution Result:
As there are only 95,000 share queuing in the market with prices at or within 4 spreads away from the best bid price upon order submission, the first round of submission can only fill up 95,000 shares. The order (with the remaining unfilled order quantity 155,000 shares) is resubmitted into the market for a second matchup.
|
BID
|
QTY
|
Trade Executed (Sell)
|
|---|---|---|
| $15.98 | 50,000 | 50,000 shares @ HK$15.98 |
| $15.96 | 20,000 | 20,000 shares @ HK$15.96 |
| $15.94 | 0 | 0 shares @ HK$15.94 |
| $15.92 | 15,000 | 15,000 shares @ HK$15.92 |
| $15.90 | 4,000 | Total: 85,000 shares |
| $15.88 | 0 | |
| $15.86 | 0 |
Execution Result(2):
A further 85,000 shares are filled up.The 3rd round of order (with order quantity 70,000 shares) is resubmitted to the market for a final matchup.
|
BID
|
QTY
|
Trade Executed (Sell)
|
|---|---|---|
| $15.94 | 20,000 | 20,000 shares @ HK$15.90 |
| $15.92 | 2,000 | 2,000 shares @ HK$15.88 |
| $15.90 | 0 | Total: 22,000 shares |
| $15.88 | 500 | |
| $15.86 | 0 |
Execution Result(3):
In the final round of submission, as there are only 22,000 shares queuing at market with bid price higher than the lowest limit ($15.92, 4 spreads below the prevailing bid price at time of order placement), the Market Order can only be further filled for 22,000 shares.
The unfilled portion of the order (i.e. 48,000 shares) will be automatically cancelled.
|
BID
|
QTY
|
Trade Executed (Sell)
|
|---|---|---|
| $15.90 | 60,000 | |
| $15.88 | 40,000 | |
| $15.86 | 100,000 | |
| $15.84 | 80,000 | |
| $15.82 | 50,000 | Total: 0 shares |
| $15.80 | 200,000 | |
| $15.78 |
Execution Result:
Although at the time of order placement, the prevailing bid price is $16.00 with outstanding queues. However, due to market fluctuation and as when the order reaches SEHK, if the prevailing best bid price falls to $15.90, the Market Order will be rejected.
Customer needs to re-submit a new Market Order in this scenario.