Margo wants to reduce the cost of selling of her Christian Dior shares, Matt suggested that she should use European electronic crossing network to sell some of her shares. He told Margo that these networks are cheap, preserve anonymity and allows for 6 crossing opportunities of trades per day. They also allow participants to place some restrictions such as price and minimum fill. All orders submitted to the network is good for a day which means that any unfulfilled part of an order is automatically resubmitted to subsequent crossing sessions during the day. Following Matt’s advice, Margo has submitted her 160,000 CD shares to be sold in the European crossing network with a minimum fill of 125,000. The following orders are on the network for the shares of CD at the time of the first crossing session of the day. The most recent trading price of CD at the Paris Bourse is €36. • A order: a market order to buy 80,000 shares • B order: a market order to sell 55,000 shares • C: an order to buy 20,000 shares at €35 In the next crossing session new orders are submitted. The most recent trading price of CD at the Paris Bourse is € 38. • D order: a market order to buy 160,000 shares • E order: A market order to sell 80,000 In the first crossing session discuss what trades would take place on the crossing network and what orders remain unfilled? In the second crossing session discuss what trades would take place on the crossing network and what orders remain unfilled?
Margo wants to reduce the cost of selling of her Christian Dior shares, Matt suggested that she
should use European electronic crossing network to sell some of her shares. He told Margo that
these networks are cheap, preserve anonymity and allows for 6 crossing opportunities of trades
per day. They also allow participants to place some restrictions such as price and minimum fill.
All orders submitted to the network is good for a day which means that any unfulfilled part of
an order is automatically resubmitted to subsequent crossing sessions during the day. Following
Matt’s advice, Margo has submitted her 160,000 CD shares to be sold in the European crossing
network with a minimum fill of 125,000. The following orders are on the network for the shares
of CD at the time of the first crossing session of the day. The most recent trading price of CD
at the Paris Bourse is €36.
• A order: a market order to buy 80,000 shares
• B order: a market order to sell 55,000 shares
• C: an order to buy 20,000 shares at €35
In the next crossing session new orders are submitted. The most recent trading price of CD at
the Paris Bourse is € 38.
• D order: a market order to buy 160,000 shares
• E order: A market order to sell 80,000
In the first crossing session discuss what trades would take place on the crossing
network and what orders remain unfilled? In the second crossing session discuss what trades would take place on the crossing network and what orders remain unfilled?
Step by step
Solved in 5 steps
