scarletyoke
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There are several instituional investors who designate their orders to be give-up orders. Can someone shed light on what give-up orders are.
Thanks
J
Thanks
J
Giveup counterparty
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sara.corner007
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Before September, I hadn't heard the words "counterparty risk" in a long time. Now, not surprisingly, I can't have a conversation on the Street without discussing counterparty risk, nor, I presume, can traders trade without those words hanging in the air.
Although we've been talking about the buy side becoming more independent of the sell side for the past three to five years, in volatile times like these we realize how dependent buy-side firms are on their bulge-bracket brethren. In fact, as Editor-at-Large Ivy Schmerken reports in this month's cover story ("Buy Side Reevaluates Counterparty Risk and Reliance on Sell-Side Trading Platforms"), while the buy side is examining the possibility of moving away from the bulge bracket and trading instead with agency brokers to avoid counterparty risk, even with the current turmoil buy-side firms are not ready to give up on their bulge-bracket relationships yet — at least, not as long as their trading commissions are being used to pay for both execution and research. According to sources, the buy side still gets more bang for the buck with the bulge bracket.
One area in which counterparty risk is driving the buy side to seek changes in its relationship with the sell side, however, is the client commission agreement. While the CCA was a great concept that helped buy-side firms unbundle their commission dollars from execution dollars, the current instability of some broker-dealers has highlighted the risk that a buy-side firm faces when it pools its research dollars with one broker-dealer. As always, though, out of chaos comes opportunity, and there already are some sell-side firms working to create a CCA utility to offset some of that risk (see "CCAs May Get a Face Lift As Counterparty Risk Looms Large?").
Counterparty risk even comes into play with regard to algorithms and technology. Buy-side firms may increasingly execute trades on their own, but they still rely on the bulge bracket's algos and technology to trade. If, say, Goldman Sachs went out of business today, how would REDIPlus users cope? Then, of course, there are the dark pools, many of which are broker-owned. There has been talk that these broker-owned dark pools will lose order flow to independently owned crossing networks as the buy side seeks to minimize its exposure to the reeling brokers.
Although we've been talking about the buy side becoming more independent of the sell side for the past three to five years, in volatile times like these we realize how dependent buy-side firms are on their bulge-bracket brethren. In fact, as Editor-at-Large Ivy Schmerken reports in this month's cover story ("Buy Side Reevaluates Counterparty Risk and Reliance on Sell-Side Trading Platforms"), while the buy side is examining the possibility of moving away from the bulge bracket and trading instead with agency brokers to avoid counterparty risk, even with the current turmoil buy-side firms are not ready to give up on their bulge-bracket relationships yet — at least, not as long as their trading commissions are being used to pay for both execution and research. According to sources, the buy side still gets more bang for the buck with the bulge bracket.
One area in which counterparty risk is driving the buy side to seek changes in its relationship with the sell side, however, is the client commission agreement. While the CCA was a great concept that helped buy-side firms unbundle their commission dollars from execution dollars, the current instability of some broker-dealers has highlighted the risk that a buy-side firm faces when it pools its research dollars with one broker-dealer. As always, though, out of chaos comes opportunity, and there already are some sell-side firms working to create a CCA utility to offset some of that risk (see "CCAs May Get a Face Lift As Counterparty Risk Looms Large?").
Counterparty risk even comes into play with regard to algorithms and technology. Buy-side firms may increasingly execute trades on their own, but they still rely on the bulge bracket's algos and technology to trade. If, say, Goldman Sachs went out of business today, how would REDIPlus users cope? Then, of course, there are the dark pools, many of which are broker-owned. There has been talk that these broker-owned dark pools will lose order flow to independently owned crossing networks as the buy side seeks to minimize its exposure to the reeling brokers.
rathcoole_exile
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in English ?
Lee Shepherd
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They cannot translate it for you nor know truely what they've posted. This is a copy and paste page from a site with many ads so I wont post the link. The article was written by Kerry Massaro, NOT the sara.corner from India above.
A pure rip off with no mention of the original author but instead past off as though its there own. sara.corner has gone as far to even remove the last paragragh that identifies that this is a link from a different author which then goes on to post there email so that they will look to post the predictions on there advanced trading . com website.
A give-up order is when you send a cash trade to be converted into a synthetic. For example you may have bought 100 BT shares, so rather than settling the trade in your name you give-up to a Bank who will then create a swap using the Hedge you have provided them and reflect this synthetic as your custodian.
