Questions and Answers Select the category from the list below that you would like to read about: About MTS Membership MTS Rules Data Instruments MTS Trading MTS Technology Forum News Links Ask MTS a question General Feedback Search our sites Enter the word you want to search on in the box provided on the top right hand side of our site and press enter. Contact us e-mail: communications@mtsgroup.org Switchboard: + 44 20 7797 4100         Facsimile: + 44 20 7797 4511                             << Back   MTS Trading What products does the MTS system offer? What types of order execution are offered? What types of order placing and execution does the MTS system have? What post-trading functionalities does the MTS system have?                             Answers What products does the MTS system offer? CASH TRADING FACILITY Possible to trade on: - price or yield decimals or 32nds fixed coupon, floating rate coupons, index-linked coupons, zeros, Strips REPO TRADING FACILITY Trade on rate or floating rates such as spreads (e.g. spread to EONIA) Classic vs. Buy-sell back Name give-up vs. Anonymous (and consolidated book allowing both to co-exist) GC allocator All maturities (including spot) Enter proposals/orders View best five bids and offers; can aggress the non-best Market Statistics BASIS TRADING FACILITY Trade on gross basis Allows futures & cash to be traded simultaneously Enter proposals/orders Calculates the price of the cash leg Calculates the futures hedge amount & gives up the futures leg to the relevant futures account Futures: Eurex, LIFFE (soon) GREY MARKET TRADING Allows the trading of government bonds for which the issuing agent has announced the auction but which have not been issued Settlement falls on the first settlement date ISSUER TRADING: TAPS & BUY BACKS Allows issuers to auction tap issues and conduct buy back programmes with their primary dealers Treasury switch auctions are currently being developed also         What types of order execution are offered? Fill & Kill - The order can be filled completely or only partially. In case the order is executed only partially, the remaining quantity is automatically cancelled from the system. Fill or Kill - The order must be completely filled or it will be automatically cancelled from the system Fill & Store - The order stays in the system either until the quantity is completely executed, or until it is cancelled by the trader or until market close.       What types of order placing and execution does the MTS system have? Order driven The Repo Trading, Basis trading and Spread trading functionalities are order driven and allow the above-mentioned types of order execution Quote driven MTS outright cash functionality is a click and trade auto-match system. It is designed to cater for the heavy load of quote-driven activity in wholesale markets Auto-matching Orders are automatically matched by price and quantity in respect to the price-time priority Negotiation Negotiation business tends to be generated by the buy-side order-driven market. The ability to negotiate is provided on one of MTS value-added services called the Single Dealer Market. This product allows a market maker to trade with its Clients over Internet-based technology. A client can send an order or request a quote from its Dealer. The Dealer has the option to change the price/quantity when replying to the Client. Manual Acceptance Outright cash: the system permits the manual acceptance or rejection of orders received for amounts below the minimum quotable amount ("odd-lot"). The odd lot threshold is a system parameter agreed by each local market independently (since each domestic market is a separate company with separate rules and regulations). Option of Blind trading using a Central Counterparty / Risk Management MTS is currently in the process of establishing the use of Central Counterparties, which will naturally eliminate any risk participants are exposed to when trading with other system participants. Repo Market: Repo Trading Facility includes a blind segment (CCP) which doesn't not carry any credit risk and a non-anonymous one (name give-up). Name give-up orders are subject to manual acceptance from the proponent (application can be rejected on credit grounds) Request for Quote (RFQ) An MTS company, BondVision, an internet-based dealer-to-client market, facilitates RFQ trading. MTS market makers who wish to access BondVision do so through the existing technology of the MTS systems. BondVision Clients are buy-side (fund/asset managers, insurance companies, etc) - they trade by requesting a quote to up to four BondVision Dealers. Upon receipt of the responses, the Client selects the optimal price at which he/she wishes to trade.       What post-trading functionalities does the MTS system have? The MTS system provides straight through processing to all participants. After trades are executed, settlement instruction are automatically generated from the Telematico system and sent via swift message to the designated settlement institution for that product of class. The Telematico settlement and clearing process offers several advantages: Reduce involvement of Back Office Staff Elimination of potential errors (i.e. mismatching) Reduces settlement and clearing costs At the trader level, there are three types of post-trade reports: Blotter which summarise the contracts filled and each line can printed for ticketing purposes (as below) Audit trail of each individual order and its subsequent fill, partial fill or zero fill End of day settlement reports (reports showing the final settlement amounts and providing confirmation that the settlement instructions have been sent to the relevant depositary/central counterparty).