Please read on for an overview of an exciting new opportunity
on the Canadian Securities Exchange!
Dark Order Overview
Trading in the Dark
The CSE offers three types of pegged orders. These are hidden orders (not visible in public market data) where the trading price is pegged to the National Canadian Best Bid and Offer (“NBBO”).
All three types of dark orders will trade ahead of any visible volume in the CSE book*. The CSE has a single book for both hidden and visible orders; any order* attempting to interact with visible orders will first trade with pegged orders in the book.
Pegged orders are a good choice for traders wanting to be ahead of any other orders already booked at the best bid or ask.
No Pre-trade Market Impact
Dark orders are not visible when they are booked. They will not lead to traders on the same side (on any market) improving their price in order to jump ahead of your order.
Similarly, a pegged order will not lead to traders on the opposite side of the market seeing your interest to trade, making their orders less aggressive and potentially moving the spread away from your order.
Choosing the Right Peg
Primary Price Improvement peg is the least aggressive Peg order. It trades at a better price compared to the other two peg types.
The Mid-point peg is a balance of aggression between Primary and Market peg orders. A good choice when trying to get ahead of other primary pegs or if you suspect the instrument is being pinged for mid-point price improvement.
The Market Peg is the most aggressive. It will trade only one tick or less better than if you cross the market. It allows a trader to be passive and book more volume than is immediately available to hit on the other side of the spread and trade ahead of all other peg types.
*Orders marked with the Bypass marker do not interact with any form of hidden orders. Bypass orders are used for special functions like simultaneously trading at multiple price levels and are a rare occurrence.
Be sure to tell your traders about these order types to try on the CSE!
If you have any comments or questions, you can create a mojo.