Order Execution

The marketindex Trading Platform executes orders slightly differently than is done traditionally in other trading environments. It is important to understand the differences and the "rules" of the system in order to fully benefit from the advantages of marketindex.

marketindex was designed to take into account the characteristics of the Internet and to exploit the advances in computing technology that have taken place over the last 5-10 years.

It offers a fully automated environment where ABN AMRO plays the role of market maker with no human intervention.

marketindex is a market making system that executes orders using the most up-to-date exchange rates prevalent in the market. It is specifically not an auctioning system or a matching engine in which a trade is executed only if both sides of the trade can be filled at the time of the buy/sell request. Moreover, marketindex does not require a trader to request a bid/ask quote from a pricing source and then make a buy/sell decision based on the quote offered. There are three types of Margin Trading Orders that a Customer may submit to marketindex:

An Order to buy at the marketindex Offer Price or to sell at the marketindex Bid Price quoted on the Online Screen at the time the Order is submitted to marketindex.

When a market order is submitted by an investor, it is sent immediately to the marketindex servers without further communication with the trader (assuming various boundary conditions such as sufficient margin requirements are met). The rate used for the trade will correspond to the most current rate maintained at the servers level and not necessarily the rate displayed in the Buy/Sell Market Order window at the time the order was submitted. This is because the rate may have changed between the time the order was submitted and the time the order is executed. Typically, the difference between the rate obtained for an order and the rate displayed in the Buy/Sell Market Order window when the order is submitted will be small (and often to the advantage of the investor). However, in times of market volatility, the difference can be larger - in this case, price bounds can be used to limit your risks, as described below.

An Order that has a Trigger Price below the marketindex Offer Price for a Buy/Long Order, or above the marketindex Bid Price for a Sell/Short Order, as compared with the marketindex Prices quoted on the Online Screen at the time the Order is submitted to marketindex.

For Limit Orders and Market-if-Touched Orders, the Customer must specify a period of time of between one hour and one month during which, if the conditions are satisfied, marketindex must send the Order to the marketindex Trading Server for execution. If, on expiry of that period of time the conditions are not satisfied, marketindex will automatically cancel the Order.

A Customer must set a Trigger Price for Limit Orders and Market-if-Touched Orders. The Trigger Price is the price at which marketindex will automatically send a Limit Order or a Market-if-Touched Order to the marketindex Trading Server for execution.

For a Limit Order which is a Buy/Long Order, the Trigger Price will always be lower than the marketindex Offer Price prevailing at the time the Order is placed on marketindex. For a Limit Order which is a Sell/Short Order, the Trigger Price will always be higher than the marketindex Bid Price prevailing at the time the Order is placed on marketindex.

For a Market-if Touched Order which is a Buy/Long Order, the Trigger Price will always be higher than the marketindex Offer Price prevailing at the time the Order is placed with marketindex. For a Market-if-Touched Order which is a Sell/Short Order, the Trigger Price will always be lower than the marketindex Bid Price prevailing at the time the Order is placed with marketindex.

A Customer may also specify Price Bounds for any type of Margin Trading Order. Price Bounds are a range of upper and lower price limits within which an Order is to be executed.