Handle bulking
Overview
If you want to combine similar trade orders from client portfolios into one big order before sending them to the market, use these features in the order flow.
Supporting portfolio
Supporting portfolio can be used in cases where minimum block size or trade amount requirements aren't met, and you will do the supporting buy (or sell) to fill these requirements.
Trade order grouping criteria
The orders that have the same
transaction type,
security,
currency
execution method
are grouped together into the same bulked transaction.
You can also specify additional bulking criteria. To do this, go to Tools → Administer → Trade order bulking and fill in the fields:
- Additional grouping factor
- Internal info keys used to group trade orders (comma-separated)
- Carry over unit price to bulked trade order (manual runs) and Carry over unit price to bulked trade order (automatic runs)
Amount-based (unit-based) vs trade-amount-based orders
Bulk trade orders and bulk order execution distinguish between amount-based and trade amount-based orders.
Amount-based orders are orders whose amount (number of units/shares) is considered to be fixed. For example, the client wants to purchase/sell 100 shares of Nokia stock.
This means that any fees added on top of a buy order simply increase the trade amount, and fees added to a sell order decrease the trade amount, but do NOT affect the number of units.
This should be considered as the default setting, as changes to the execution of amount-based orders are handled as people usually expect.
Trade amount-based orders are orders whose trade amount is considered to be fixed. For example, the client wants to subscribe to fund X with 1000 EUR, or buy/sell 1000 EUR worth of Nokia shares.
This means that any fees added to a buy order reduce the number of units bought, while keeping the total trade amount (with fees) unaffected. Similarly, fees added to a sell order tend to increase the number of units sold to cover the fee.
With high-block-size instruments, it's not always possible to keep the trade amount exactly fixed. This mode is designed to be used with e.g. fund subscriptions/redemptions.
Whether the order is given in units (e.g. buy 10 units of Nokia stock) or trade amount (e.g. buy 1000€ of Nokia stock) is determined by:
Default: Order's Execution method (added in process version 4.1):
Execution method Units → unit-based order
Execution method Gross trade amount → validation error (not supported)
Execution method Net trade amount → trade amount -based order
Fallback 1: configuration "Comma-separated list of order types to treat as unit orders (overridden by trade's execution method, if defined)"
Fallback 2: transaction types, in accordance with rebalancing settings (see below)
Getting started
To bulk trade orders in FA, you will need to create a bulk portfolio and a supporting portfolio. Instructions can be found at Set up portfolios and groups for the trade order flow.
Bulking steps
When your client’s portfolio belongs to the Bulk group, have been validated and have Accepted status, system will automatically add a Bulk-Waiting tag for these orders
Open the bulking functionality
Go to the Dashboard Bulking. Expand the Bulk - Waiting section.
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At the bottom of the screen select either Bulk → Bulk trade orders or Bulk → Bulk valid trade orders directly. The former option allows you to specify bulk parameters (see next steps). The latter option bulks the orders directly with all applicable securities and no fee calculation.
Note
The Bulk valid trade orders directly functionality is only available if you have the role TOM_BA specified. Also note that this functionality doesn't take any configured additional trade order grouping criteria into account (see the section "Trade order grouping criteria" above).
Define bulk parameters
Note
These steps are only available if you selected Bulk trade orders in the previous step. If you selected Bulk valid trade orders directly, these steps are automatically skipped and the bulked order is made with default parameters (no additional fee calculation, all applicable securities)
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1. Fee calculation type
Fixed fee percentage (enter % on the right)
Security specific fee percentage
Portfolio-specific fee percentage
Skip fee calculation
Note
If client order already has a fee entered (into the cost field), it is taken as-is.
Calculating fees works well when buying low-block-size instruments with a locked trade amount. Otherwise percentage-based fees will probably have some inaccuracy!
Amount-based orders may be executed at a different trade amount due to market fluctuations → client order's calculated fee isn't automatically updated to reflect this change!
Trade amount based orders against high-block-size instruments are tricky in general, because we may end up having to round the trade amount up or round down to a full block; fee is calculated before this rounding takes place, resulting in minor inaccuracy
An alternative to calculating fees in the bulking process is to distribute the actual realized fees from the bulk order back to the client orders
Or you can define fees to created client transactions via rule:
2. Define the fee type
3. Select the bulk group
Send your bulked order to execution
If you have a trading connection, make sure that only bulked executable orders are sent to the execution venue (for more information, see Send trade orders to trading platforms). If you do not have a trading connection, you should mark the orders that you have sent to execution via Modify trade orders - Set trade order status - Sent to execution.
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