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The relative order provides a means for traders to seek a more aggressive price than the National Best Bid and Offer (NBBO). By becoming liquidity providers, and placing bids or offers into the book that are more aggressive than what is currently quoted, traders increase their odds of execution. Quotes are automatically adjusted when other market participants become more aggressive. For a buy order, your bid is pegged to the NBB by a more aggressive offset amount*, and if the NBB moves up, your bid will also move up. For sales, your offer is pegged to the NBO by a more aggressive offset, and if the NBO moves down, your offer will also move down. In addition to the offset, you can define an absolute cap, which works like a limit price, and will prevent your order from being executed above or below a specified level.
For relative orders with a "0" offset, the order is submitted as a limit order at the best bid/ask, and will move up and down with the market to continue to match the inside quote.
Note: If you have tooltips enabled, you can hold your mouse over the Limit price of the relative order and see the current exchange price for that order.
To enter a Relative order
- Hold your cursor over a field in the order row fields until the green “+” sign appears. Click the “+” sign to show the list of order fields.
- In the Price category, select Pct Offset. The field is added to the left of the selected field.
Note: If you submit a relative order with a percentage offset, you are instructing us to calculate an order price that is consistent with the offset, but that also complies with applicable tick increments. Therefore we will calculate the order price rounded to the appropriate tick increment (e.g., pennies for a U.S. stock trading at a price over $1.00). Buy orders will be rounded down to the nearest acceptable tick increment and sell orders will be rounded up.
You can modify the offset amount for several relative orders on the same trading page at one time. To do this, select multiple relative orders by holding the Ctrl key and clicking on each order. After you have selected all relative orders, right-click on one of the selected orders and select Modify. In the Relative Order Modification box, define an offset or percent offset amount and click OK. All selected orders will be changed.
Please note that you can change the name of the Relative order to Pegged-to-Primary using the Settings page of the Display group in Global Configuration.
*The offset is the amount that will be added to the best bid (for a buy order) and subtracted from the best ask (for a sell order) to create the limit price at which the relative order will be submitted.