Order Execution (“Best Execution”) Policy
Marketiva MM DOO (hereinafter referred to as "Marketiva") is required to take all reasonable steps to obtain the best possible result (or “best execution”) on behalf of its clients either when it executes client orders or when it receives and transmits orders for execution.
The best possible result we are required to provide to our clients is not limited to execution price but also includes cost, speed, likelihood of execution and likelihood of settlement and any other factors deemed relevant.
These rules require firms to put in place an execution policy and to provide appropriate information to its clients on its order execution policy. This document contains a summary of Marketiva’s Best execution policy.
Financial Instruments
Marketiva provides trading services in Forex, Funds, Indexes and Commodities listed at http://www.marketiva.com/index.ncre?page=instruments page.
On 1st April, 2010, the tradable instruments are:
- Forex: EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD, NZD/USD, EUR/JPY, EUR/GBP, EUR/CHF, GBP/JPY, AUD/JPY, CHF/JPY, GBP/CHF, EUR/CAD, EUR/AUD, AUD/CAD
Our Forex rates are based on current average interbank trading activity. Each instrument has bid price, offer price, last price (average of bid and offer), change from daily open price, highest and lowest daily prices and price update time-stamp.
- Commodities: Gold, Silver, Platinum, Palladium
Our Commodity rates are based on current prices quoted on largest commodity exchanges. Each instrument has bid price, ask price, last price(average of bid and ask), change from daily open price, highest and lowest daily prices, price update time-stamp and currency the prices are quoted in.
- Indexes: Dow Jones, Nasdaq 100, S&P500, DAX, FTSE 100, CAC40, Russel 3000
Our Index rates are based on current index values provided by various exchanges and financial institutions. Each instrument has bid price, ask price, last price (average of bid and ask), change from daily open price, highest and lowest daily prices and price update time-stamp.
- Funds: Constantine, Yangtze, Asiasset, Brasillion, Indiamond, Nippon, Columbus, Eastera
Our Fund rates are based on Fund pricing models (e.g. net asset value, preset percentage). Each instrument has bid price, ask price, last price(average of bid and ask), change from daily open price, annual yield (profit in the last 365 days), price update time-stamp and currency the prices are quoted in.
It’s solely in the discretion of the Company to decide which types of financial instruments to make available and to publish the prices at which these can be traded and the above list can vary since new financial instruments may be added in the future.
Order Execution
Marketiva is always the counterparty (or principal) to every trade, so it doesn’t act on behalf of its clients but acts as the relevant execution venue for clients’ orders, which will be executed on an OTC basis rather than on a regulated market or multilateral trading facility (MTF).
The client has the option to place the following type of orders for execution:
- a market order, which is an order instantly executed against a price that the Company has provided. The client may attach to a market order a stop loss and/or take profit. Stop loss is an order to limit client’s loss, whereas take profit is an order to limit client’s profit.
For example, if the current market price of a financial instrument is 129.34 / 129.38, this means that a participant in the market is willing to buy the instrument from the client at 129.34 and / or sell it to the client at 129.38.
- a pending order, which is an order to be executed at a later time at the price that the client specifies. When the price provided by the Company reaches the price specified by the client, the order will be executed at that price.
The following types of pending orders are available:
Stop Order
Initiating a trade with a stop order means that the client will only open a position if the market moves in the direction he is anticipating. For example, if an instrument is trading at 129.34 / 129.38 and the client believes it will move higher, he could place a stop order to buy at 129.48. This means that the order will only be executed if ask price in the market moves up to 129.48. The advantage is that if the client is wrong and the market moves straight down, he will not have bought (because 129.48 will never have been reached). The disadvantage is that 129.48 is clearly a less attractive rate at which to buy than 129.38.
Opening a position with a stop order is usually appropriate if the client wishes to trade only with strong market momentum in a particular direction.
Limit Order
A limit order is an order to buy below the current price, or sell above the current price.
For example, if an instrument is trading at 129.34 / 129.38 and the client believes the market will rise, he could place a limit order to buy at 129.28. If executed, this will give him a long position at 129.28, which is 10 pips better than if he had just used a market order. The disadvantage of the limit order is that if the instrument moves straight up from 129.34 / 129.38 his limit at 129.28 will never be filled and he will miss out on the profit opportunity even though his view on the direction was correct.
Opening a position with a limit order is usually appropriate if the client believes that the market will remain in a range before moving in his anticipated direction, allowing the order to be filled first.
The client may attach to any pending order a stop loss and/or take profit.
The client may modify an order before it is executed. The client has no right to change or remove stop loss, take profit and pending orders if the price has reached the level of the order execution.
Costs, Fees and Other Relevant Factors
Marketiva doesn’t charge commissions or fees, only spreads. Spreads between bid and offer (ask) prices are variable: they depend on current market conditions and can change at any time.
Price spreads often unexpectedly change and greatly increase during weekends, in after-hours trading, in case of market-related announcements or market turmoil.
The client can always monitor market condition spreads at: http://www.marketiva.com/index.ncre?page=market-conditions page.
Under certain market conditions, especially during, but not limited to, market-related announcements, weekends, after-hours trading, market turmoil, low liquidity and fast moving market, the price at which orders are executed may be different from the one specified by the client and there can be delays.
For example, when markets are volatile (e.g. week openings, news announcements, significant events) instrument prices can move 50 points or more in just one single jump, which can greatly affect execution of the orders. For example, if a price jumps from 200.10 to 200.50 (in just one 40 points move) and the client short position's stop-loss was at 200.20, his position would be closed at the current market price of 200.50, which is 30 points worse than his stop-loss level.
On the other hand, if his long position's exit target was at 200.20, his position would again be closed at the current market price of 200.50, which is 30 points better than his exit target level.
Marketiva is committed to provide the best possible result for its clients in these cases and takes all the reasonable steps to minimize the delays that may occur.
Overnight Interest
Marketiva has introduced Zero-Interest policy on all open positions. No overnight interest is currently charged or paid on open positions while most of other market makers charge Overnight Interest as a cost of carry associated with holding a position for more than one day.
For this reason there are no conflicts between Marketiva's services and Islamic Riba prohibition.
For more details, please check the Islamic Trading Account Conditions PDF file available in the Download section of the Financial Information and Complaint Resolution System (FICRS) at http://www.ficrs.org/.
Monitoring and Review of Our Best Execution Policy
Marketiva will monitor on a regular basis the effectiveness of this policy and, where appropriate, reserves the right to correct any deficiencies. Clients will be always able to find the updated version of the Best Execution policy on our self-regulatory website and will be notified by the Company if some changes and amendments will affect them.