Functionality for investors
Nordic Growth Market strives to provide fair and orderly trading for investors. We do this, among other things, by providing functionality that benefits investors.
Functionality that protects investors from trading on deviating prices.
On November 8, 2016, NGM introduced Order Protection Mode (OPM) as a new functionality for trading in exchange traded products (ETP). OPM aims to protect investors from trading on deviating prices when the market maker is not present in the order book with both a buy and sell price. If the market maker is not present in the order book, all orders in the instrument will instead be placed in a so-called Order Protection Auction (OPA). An OPA is terminated after a short random time period as soon as the market maker comes back in with the buy and sell prices. OPM guarantees that trading always takes place at or inside the market maker's spread and it is still possible to trade within the market maker's spread.
Information on OPM och OPA in the market data feed
Information that OPM is active and whether an OPA has been triggered in an instrument is distributed in the market data and you can also see it on the instrument's detailed view on NGM's website. If OPM is not activated, a red flag appears at the instrument symbol. At the same location, an icon with a blue hammer will show if the instrument is in an OPA. Also note that the market maker's purchase price in the detailed view is marked with green color and that the market maker's selling price is marked with orange color.
Best Price Match
On NDX, trades against the market maker are executed on the most favorable price for the investor. This is applicable to e.g.
- Multi-day orders
- Volatile price movements
- Temporary absence from market maker
An example when you sell: You own a warrant and the market maker offers to buy it for SEK 3 and sell it for SEK 4. You have placed an order to sell your warrant for SEK 5. A strong price movement is taking place and the market maker's next price is SEK 6 against SEK 7. At NGM you get to sell your warrant for SEK 6, which is SEK 1 more than what you were initially willing to sell for. Market practice on many other exchanges is that you will sell your warrant for SEK 5.
An example when you buy: You own a bull certificate and the market maker offers to buy the certificate for SEK 8 and sell it for SEK 9. You have placed an order to buy for SEK 7. A strong price movement is taking place and the market maker's next price in the certificate is SEK 3 against SEK 4. At NGM you get to buy the certificate for SEK 4, which is SEK 3 less than what you were initially willing to buy. Usually and on many other exchanges you will buy your certificate for SEK 7.
Buy Back is also known as Sold Out Buy Back.
Activated when the market maker for an issued product has sold out the entire issued volume as well as for products where the issuer considers that it is not possible to provide a selling price.
- Only the Market Maker can buy the instrument
- Other holders can only sell / execute at Market Maker's price
The purpose of the function is to prevent trades being executed outside of the market price.
Knock Out Buy Back
Knock out buy back enables investors to get back the residual value directly in a knocked out product.
For products that are knocked out and where there is a residual value, issuers can choose to buy back the product during the current trading day. This means for you as an investor the opportunity to obtain the residual value directly instead of waiting for the 10 trading days that it would otherwise take to liquidate the instrument and execute payment of the residual value. As the holder of a knocked-out product with residual value, you can only sell back at the price which the issuer offers to buy. Product types for which this feature is available are Mini Futures and Turbo Warrants, where strike is different from the knock out level. You can see if an instrument has the enabled function in the instrument's detailed view on NGM's website.