When you enter symbols and quantities for a barter order and click on "Trade from Order Book" in the Order Entry screen, you are presented with a Limit Order Book (LOB) for your particular barter order. (See LOB Image.) The LOB is partitioned into three sections: (1) at the top, a National Market picture of the two securities in your order, (2) at the bottom, information about individual offers for your barter order, and (3) in the middle, information about the Quick Fill the fastest way to fill your order.

Offers for your barter order

By convention, each response to a barter order in the LOB is referred to as an "offer", even though it comprises both an implicit bid for one stock and an implicit offer for another stock. Barter order offers can arise from marketmakers' directed responses, from combinations of pending internal barter orders, from bids and offers in the national markets, or from a combination of these. Learn more about offer types

Internal Offers. Offers from marketmakers and from pending barter limit orders are internal to the BarterSecurities system. Internal offers may improve national markets by providing more favorable execution prices, by providing a greater quantity to trade, or both. Internal offers, unlike national market offers, allow one-click order delivery and immediate trade reporting for the user.

Trading Against Individual Offers. Users can deliver orders to trade against individual offers by clicking on the "Trade" button at the right of any row. Because the offers are listed in order of decreasing price attractiveness, clicking on a trade button on any particular row will attempt to take out all offers at or above the clicked buttons row. It is important to note that, while internal offers may be executed immediately, national market offers must be executed in the traditional way. Accordingly, there is a significant risk that one or more legs of a national market offer may not exist by the time that the order to trade is delivered. Consequently, users must define (through a preferences screen) how they would like such orders to be treated. Whenever an order is sent to the national market, the Maintain Share Ratio option calls for the two legs of a barter order to be treated as market orders, while the Maintain Limit Price option calls for the two legs to be treated as separate limit orders. To avoid these occurances, users should attempt to trade against internal offers. The easiest way to do this is to use the Quick Fill button, which is described below.

Limit Order Book columns

The bottom partition of the Limit Order Book screen shows four columns: (See LOB Image).

• Type
• Shares
• Buy-side Ask
• Cost compared to National Prices

Quick Fill

The middle section of the BarterSecurities Order Book allows the user to attempt an instant execution of a barter order by trading only on internal offers. Even in a case where a national offer is more favorable than internal offers, some users may prefer to try to obtain an instantaneous trade execution, rather than taking the execution risk of trading on the national markets, especially when the markets are volatile. Clicking the Quick Fill button trades on the best internal orders, up to the quantity of the original entered order. The number of shares tradable (up to the number of shares requested) is shown along with the composite prices at which a fill of the order will be attempted. The sell-side price is the current NBBO bid. The buy-side price is calculated like the buy-side ask prices in the previous section, but it is an average of all offers up to the quantity shown. Resulting savings, along with the enhanced market depth from internal offers, are also shown. The receipt of a trade report is immediate. Usually, a trade will take place and a confirmation will be generated.