- The client enters a buy or sell intelligent order - Trailing Limit form for a KOBOS order, which must contain the ISIN, Total Volume (shares), deviation for Limit Price calculation (entered into the "Price" field), deviation for Stop Price calculation (entered into the "Stop Price" field) and the Order Validity. Other parameters, Minimum Quantity and Displayed Quantity can also be entered.
- The validation checker ensures the order is allowed and, if so, the order is activated. A trailing stop order is rejected if the deviation from the Stop Price is lower than the maximum spread in SPAD for the given security.
- Once the order is validated, the software defines the "opening" Stop Price using the deviation between the defined Stop Price and the current best bid (for a sell order) or best offer (for a buy order). It then searches for changes in the best bid (for a sell order) or the best offer (for a buy order) for any changes in the current Stop Price. For a sell order this change is made if the price for the best bid decreased by the deviation from the Stop Price is higher than the current Stop Price; for a buy order this change occurs when the price for the best offer increased by the deviation from the Stop Price is lower than the current Stop Price.
- The software also checks where the current Stop Price is higher than or equal to the best bid in SPAD (for a sell order) or less than or equal to the best offer in SPAD (for a buy order). If this occurs, the Trailing Limit is activated. A sell order or buy order is immediately sent to the market depending on the selected parameter. The order is active until the entire purchase or sale is completed, the order expires or is cancelled by the client.
- Two conditions must be met to activate a Stoploss sell order:
(a) The best bid on the SPAD market is lower than or equal to the current Stop Price.
(b) There are at least two buy quotes on the SPAD market. - These conditions must be met to activate a Stoploss buy order:
(a) The best offer on the SPAD market is higher than or equal to the current Stop Price.
(b) At least 2 sell quotes on the SPAD market.
Note 1) When a Trailing Limit order is placed before the opening of the SPAD market, the current Stop Price is set immediately after SPAD opens. If the Trailing Limit order is activated, the order is sent to Fixing / KOBOS using the entered parameters.
Note 2) The Trailing Limit provides an investor with additional protection against non-standard market situations (quickly changing prices, etc.).
Note 3) Once a Trailing Limit intelligent order is activated, a sell order with a Limit Price is generated on the market. If the order cannot be satisfied at once, it remains on the market until complete satisfaction or expiration of Order Validity.
If growth occurs (for a Trailing Limit sell order) or a decline occurs (for a Trailing Limit buy order), the "intelligent order" is not triggered again, e.g. the changes in the market after the order is triggered do not cause any changes in the Stop Price and Limit Price.
Hide textAn investor is concerned that the price of CZK 700 for shares of Erste Bank could cause a further sell off and decline in price and places a Trailing Limit sell order for 1,500 shares with a deviation from the Stop Price of CZK 15. The investor is concerned that remaining bids will be quickly purchased at this price level and his 1,500 shares are market price will have to be sold at much lower than this level and for this reason he enters a Limit Price deviation of CZK 5....More
- Best bid (SPAD): CZK 709.30
- Entered Stop Price deviation: CZK 15
- Entered Limit Price deviation: CZK 5
- Number of sold securities: 1,500 shares
SPAD before placing the order:
KOBOS Trailing Limit sell order was placed with a Stop Price of CZK 694.30 (best buy quotes in SPAD: CZK 709.30 - 15) and a Limit Price of CZK 689.30 (based on Stop Price CZK 694.30 - 5).
If the market begins to drop following order placement (e.g. the bids in SPAD do not rise above CZK 709.30), the Trailing Limit order is activated at the moment the best purchase quote in SPAD drops to or below a value of CZK 694.30 (and at least two quotes have been active on the market). This results in a sell order for 1,500 shares to KOBOS with a Limit Price of CZK 689.30.
| Market maker | Price (CZK) | Cumulative number of shares | |
| ING | 712.50 | 35,000 | Offer |
| WOOD | 712.00 | 30,000 |
| FIO | 711.40 | 25,000 |
| HVB | 711.30 | 20,000 |
| CS, PF, KB | 711.00 | 15,000 |
| | 710.00 | | Last trade |
| PF | 709.30 | 5,000 | Bid |
| KB | 709.00 | 10,000 |
| HVB | 708.60 | 15,000 |
| FIO, ING | 708.30 | 25,000 |
| CS, WOOD | 708.00 | 35,000 |
Before order is placed in KOBOS:
| Price (CZK) | Cumulative number of shares | |
| 713.00 | 5,650 | Bid |
| 712.30 | 4,850 |
| 712.00 | 1,850 |
| 711.50 | 1,150 |
| 711.40 | 400 |
| 711.30 | | Last trade |
| 710.00 | 200 | Bid |
| 709.80 | 1,200 |
| 709.50 | 3,400 |
| 709.00 | 3,800 |
| 709.80 | 4,150 |
SPAD following a price increase:
Based on SPAD development and pursuant to the conditions of the Trailing Limit sell order, the Stop Price increases to CZK 702.50 (pursuant to the best SPAD quotes: 717.50 - 15) and Limit Price moves to CZK 697.50 (based on Stop Price settings: 702.50 - 5).
If the value of the best buy quote declines (until the conditions for Trailing Limit activation are met), then the order is activated when the best buy quote in SPAD drops to CZK 702.50 or lower and there are at least 2 quotes active on the market. This results in a sell order being sent to KOBOS for 1,500 shares with a Limit Price of CZK 697.50.
| Market maker | Price (CZK) | Cumulative number of shares | |
| HVB | 721.00 | 30,000 | Offer |
| PF | 720.50 | 25,000 |
| ING | 719.90 | 20,000 |
| WOOD | 719.80 | 15,000 |
| FIO, KB | 719.40 | 10,000 |
| | 719.00 | | Last trade |
| CS | 717.50 | 5,000 | Bid |
| ING | 717.20 | 10,000 |
| FIO | 716.80 | 15,000 |
| WOOD, PF | 716.50 | 25,000 |
| KB, HVB | 716.20 | 35,000 |
KOBOS after increase:
| Price (CZK) | Cumulative number of shares | |
| 722.00 | 6,430 | Offer |
| 721.00 | 5,730 |
| 720.40 | 4,130 |
| 720.30 | 330 |
| 720.00 | 130 |
| 718.20 | | Last trade |
| 717.00 | 300 | Bid |
| 716.80 | 3,200 |
| 716.50 | 3,550 |
| 716.00 | 4,250 |
| 715.80 | 5,600 |
SPAD after price decrease:
Change in structure of bids and offers in SPAD (market first increases - best bid in SPAD is CZK 728, then drops to the following values):
| Market maker | Price (CZK) | Cumulative number of shares | |
| KB | 715.00 | 30,000 | Offer |
| ING | 714.80 | 25,000 |
| FIO, PF | 714.70 | 20,000 |
| HVB | 714.60 | 10,000 |
| CS | 714.50 | 5,000 |
| | 713.70 | | Last trade |
| PF | 713.00 | 5,000 | Bid |
| KB, ING | 712.90 | 15,000 |
| HVB | 712.60 | 20,000 |
| FIO, CS | 712.50 | 30,000 |
| WOOD | 712.00 | 35,000 |
KOBOS following price drop:
Based on previous developments, the Stop Price is CZK 713 (based on best quote in SPAD 728 - 15) and the limit value is CZK 708 (best on Stop Price: 713 - 5):
| Price (CZK) | Cumulative number of shares | |
| 717.50 | 4,730 | Offer |
| 717.00 | 3,930 |
| 716.30 | 3,600 |
| 715.50 | 2,100 |
| 715.00 | 400 |
| 713.00 | | Last trade |
| 712.90 | 400 | Bid |
| 712.60 | 1,000 |
| 712.50 | 2,500 |
| 711.70 | 3,200 |
| 711.50 | 4,200 |
Result:
Sell order is paired with the best bid in KOBOS and the trade is completed via three separate trades:
- 400 sold at CZK 712.90
- 600 sold at CZK 711.60
- 500 sold at CZK 712.50
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