CFD DOUBLE LEG
A CFD (Contract for Difference) is a tradable instrument that mirrors the asset underlying it. It allows for profits or losses to be realized when the underlying asset moves in relation to the position taken, but the actual underlying asset is never owned. CFD trading lets you speculate on the price movement of a whole host of financial markets such as indices, shares, currencies, commodities and bonds. The CFD Double Leg page is used to book a double-sided (hedged) CFD trade. To book a double leg trade, click on Trade > CFD Double Leg in the navigation pane.
In order to successfully book a double leg CFD trade, you must have at least two currencies offered in Entity Settings, and an at least one active counterparty (account) configured.
Booking a Trade
In order to book a trade you will need to input the details of the CFD trade. The details that you can fill out are:
- Counterparty (required) - Specify a Counterparty/Account name. The settlement type of the account must be Retail Margin Customer or Retail Margin Liquidity Provider.
- Contact (optional) - Specify a contact that requested or is associated with the trade. The contacts that will be available are contacts associated with the specified counterparty.
- Book (optional) - You can specify the book you would like this transaction to be under if your business segregates transactions into different trading books.
- House Action (required) - Specify an action (Buy/Sell). It is set up from YOUR perspective.
- Instrument (required) - Specify the CFD currency pair. The currencies that are available are the currencies that have been selected in the entity settings page. If you do not see the desired currencies listed, you will need to add the currency in entity settings. After you specifying the instrument, a default rate will typically be automatically populated. If you would like to use your own rate, you can enter it manually in the Rate field below.
- Amount (required) - Enter the amount the house is buying or selling (left-hand side of the instrument). Once you have entered an amount, the counter amount will automatically populate based on the rate. Alternatively you can enter a Counter Amount, and the Amount will automatically populate.
- Trade Date (required) - When you are entering a trade, the trade date will automatically populate as todays trade date. If it is before 5pm New York time, then the trade date will match the current date. If it is after 5pm but before midnight, then the trade date will be for the next business day.
- Comment & Client Comment (optional) - You can add internal comments (ex. comments for compliance officers) and a client comment. This information is stored on the trade and is available for subsequent reporting.
- House Action (required) - Specify an action. By default, the house action is set as the counter action of the trade booked. The action is set from YOUR perspective.
- Counterparty (required) - Specify an account that the trade is hedged against. This Counterparty will need to be in the same entity and have the settlement type Nostro.
- Hedge Rate & P/L (optional) You can enter the rate used to hedge this trade (ex. if the hedge was booked at a later date). The P/L will be automatically calculated based on the amount and differences between the rate and hedge rate.
Once you have entered all of the details of the trade, click Deal Trade. This will add a Status field which by default is Open, and will assign two Trade ID's at the top of the window. You can also click on the Deal Trade and New button which will also execute the trade, and open a new trading window allowing you to book trades in rapid succession.
Note that if you have made mistakes on your ticket, you can quickly clear the information by clicking on the Reset button.
Updating/Cancelling a Trade
Kooltra allows users to modify or cancel Open trades. In order to do this, you will need to access the details of the trade. This can be done in many different ways such as clicking the trade ID on the FX Blotter page, or searching for the trade ID in the global search bar.
Once you have opened the trade details, you can amend any trade detail that is not greyed out. This includes amending the Counterparty, Contact, Book, Action, Pair, Amount, Rate, Counter Amount, Fee, Value Date, Comment, Client Comment and Hedge Rate. Once you have amended the desired field(s), click on the Update Trade Button to complete the update.
The details tab can be accessed at the top of the CFD Double Leg entry page. This tab is typically used to view details of trades that have entered Kooltra through the API. The available details are Trade ID, External ID, Liquidity Provider, LP Trade ID, Source App, and Platform Venue.
In addition to Comments and Client Comments, users can input additional notes about the trade in the Notes tab.
The history tab tracks changes made to the trade. This includes tracking what user made the change and at what time.
The advanced tab allows you to resend the trade confirmation, which is sent to the primary contact of the counterparty (account).
CFD, booking a double leg CFD, hedged CFD