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ORDER EXECUTION POLICY Introduction In accordance with the law, we are required to put in place an order execution policy and take all reasonable steps to obtain the best possible result for our customers either when executing customer orders or when receiving and transmitting order for execution. The purpose of this document is to provide information on our Order Execution Policy and obtain your consent to it, where we are obliged to do so. This policy should be read in conjunction with our Terms of Business, however the Order Execution Policy itself does not form part of the agreement between you and us. In addition to the above the Client also consents to the fact that his orders will be executed outside Regulated Market (e.g. Licensed European Stock Exchange) or a Multilateral Trading Facility (e.g. European Financial Trading System). Scope of this policy Our Order Execution Policy applies when we execute orders on behalf of our clients (as defined in the Company s Client Classification Policy) for all the types of Contracts for Difference ( CFDs ) as applicable, offered by the Company. Different types of orders (a) Market Order(s) This is an order to buy or sell at the current market available price. When this order is executed it generates a trade position. Financial instruments are bought at ASK price and sold at BID price. You can attach to a market order Stop Loss and Take Profit orders. (b) Pending Order(s) A pending order is an order to buy or sell a financial instrument in the future once a certain price specified by the Client is reached. The Company offers APPTRADER 2
four types of pending orders. Buy Limit, Buy Stop, Sell Limit and Sell Stop or buy stop limit or sell stop limit orders. Stop Loss and/or Take profit limits can be attached to this type of order. The Client may modify or cancel a pending order before executed but has no right to modify or remove Stop Loss, Take Profit and Pending Order orders if the price has reached the level of the order execution. As specified these orders are executed when the price specified by the client is reached however in certain conditions this may be impossible. In these cases, the Company has the right to execute the order at the first available price. This can happen for example during times of rapid price fluctuations, suspension or restriction of trading, lack of liquidity and other similar cases. (c) Take Profit This is an order to secure profits. Once the market reaches the take profit price the order is triggered and treated as a limit order. If the take profit is not triggered it shall remain in the system until a later date. Execution of this order results in complete closing of the whole position. It is always connected to an open position or a pending order. The order can be requested only together with a market or a pending order. Under this type of order, the Company s trading platform checks long positions with Bid price for meeting of this order provisions (the order is always set above the current Bid price), and it does with Ask price for short positions (the order is always set below the current Ask price). (d) Stop Loss A stop-loss is designed to limit an investor's loss on a security position. This is an order to minimize losses if the financial instrument price has started to move in an unprofitable direction. If the financial instrument price reaches this level, the whole position will be closed automatically. A stop loss can be requested only together with a market or a pending order. Under this type of orders, the Company s trading platform checks long positions with Bid price for meeting of this order provisions (the order is always set below the current Bid price), and it does with Ask price for short positions (the order is always set above the current Ask price). APPTRADER 3
Execution Factors When executing orders, The Company will take all reasonable steps to obtain the best possible result under the circumstances for the client. The Company will consider considering price, speed, costs, likelihood of execution and settlement, nature, size and/or any other consideration relevant to the execution of the order. This list may not be complete such as the order in which the above factors are presented shall not be taken as priority factor. To determine the best way to execute an order for a client The Company takes into consideration the following matters described below: (a) Price: To achieve best execution, we ensure that the calculation of the prices used to execute your trades will be fair, based on the prevailing market prices of the relevant underlying instrument from a number of sources. For any given CFD, the Company will quote two prices: the higher price (ASK) at which the Client can buy (go long) that CFD, and the lower price (BID) at which the Client can sell (go short) that CFD. Together, the ASK and BID prices are referred to as the Company s price. The difference between the BID and the ASK price of a given CFD is the spread. The orders as Buy Limit, Buy Stop and Stop Loss, Take profit for opened short position are executed at ASK price. Orders as Sell Limit, Sell Stop and Stop Loss, Take profit for opened long position are executed at BID price. The Company s price for a given CFD is calculated by reference to the price of the relevant underlying asset, which the Company obtains from third party external reference sources. The Company s prices can be found on the Company s website or trading platforms. The Company updates its prices as frequently as possible considering the limitations of the technology and communication links that must be used. The Company reviews the third party external reference sources regularly to ensure that the data obtained continues to remain competitive. The Company will not quote any price outside the Company s operations time (see execution venue below). During this time the Client cannot place any order. APPTRADER 4
If the price reaches an order such as: Stop Loss, Take Profit, Buy Limit, Buy Stop, Sell Limit or Sell Stop, these orders are instantly executed. However, under certain trading conditions it may be impossible to execute orders (Stop Loss, Take Profit, Buy Limit, Buy Stop, Sell Limit or Sell Stop) at the Client's requested price. In this case, the Company has the right to execute the order at the first available price. This may occur, for example, at times of rapid price fluctuations if the price rises or falls in one trading session to such an extent that, under the rules of the relevant exchange, trading is suspended or restricted, or this may occur at the opening of trading sessions. The minimum level for placing Stop Loss, Take Profit, Buy Limit, Buy Stop, Sell Limit and Sell Stop orders, for a given CFD, is specified under your Trading Agreement. (b) Execution speed, which is largely determined by the market model and the execution channel, refers to the period between receipt of the Order and the time the Order can be executed at the Execution Venue (as defined in Commission Directive 2006/73/EC implementing MiFID). (c) Likelihood of Execution: The likelihood of execution refers to the likelihood that an Order will be executed at an Execution Venue. Since Financial Instruments are usually subject to price fluctuations, and a price trend detrimental to the Client may arise following the Order being placed with an Execution Venue, priority may be given to venues where the Order is likely to be fully executed within a short space of time. The cases when it may not be possible to arrange an order for executions can be trading sessions starting moments, news times and others. The liquidity of an Execution Venue is especially significant for whether an Order is executed at this Execution Venue. In addition, the Company is entitled, at any time and at its discretion, without giving any notice or explanation to the Client, to decline or refuse to arrange for the execution of any order or request or instruction of the Client in circumstances explained in the Client Agreement/General Terms and Conditions. (d) Likelihood of settlement: The Company is offering Financial Instruments that do not involve the delivery of the underlying asset, so there is no settlement as there would be, for example, if the Client had bought shares. APPTRADER 5
(e) Size of order: The Client can find the minimum and maximum size of an order directly in the trading platform once he selects to place an order with a specific Financial Instrument. Minimum and maximum size are different per each Financial Instrument. (f) Market Impact: Some elements may rapidly affect the price of the underlying instruments/products from which the Company s quoted price is derived. In this case the Company will take all reasonable steps to obtain the best possible result for its Clients. When dealing in a financial instrument on your behalf we will exercise our discretion in assessing the criteria that we need to consider achieving best execution. The relative importance of these criteria will be judged on an orderby-order basis, in line with our commercial experience and with reference to market conditions. In executing orders for Retail Clients, in the absence of any specific instructions, we generally give precedence to the factors that allow us to deliver the best possible result in terms of value to the client. The execution practices in Financial Instruments (a) Slippage Slippage may occur when trading in Financial Instruments. Slippage means that at the time that an Order is presented for execution, the specific price showed to the Client may not be available. In this case the Order will be executed as close as possible (in number of pips) from the Client s requested price. Slippage is the difference between the expected price of an Order, and the price the Order is executed at. If the execution price is better than the price requested by the Client, this is referred to as positive slippage. If the executed price is worse than the price requested by the Client, this is referred to as negative slippage. Slippage more often occurs during periods of illiquidity or higher volatility making an Order at a specific price impossible to execute. Slippage can occur also during Closed at Loss, Close at Profit, Trailing Stop and other types of Orders. We do not guarantee the execution of your Pending Orders at the price specified. However, we confirm that your Order will be APPTRADER 6
executed at the next best available market price from the price you have specified under your pending Order. Also, please note that at the time we receive your order there may be no functioning market or Exchange which is open for trading on which the underlying product is traded. At such times the market may be illiquid, trade halted or suspended, and other influences may affect the price and we reserve the right not to execute your order under such conditions. However, we confirm that your Order will be executed at the next best available market price from the price you have specified under your pending Order. (b) Re-quoting This is the practice of providing a secondary quote to the client after an instant order has been submitted; the client must agree to this quote before the order is executed. The Company will requote instant orders if the requested price originally specified by the client is not available. The secondary quote provided to the client is the next available price received by The Company from its third-party liquidity providers. Please note that re-quotes are not applicable for Pending Orders or accounts or currency pairs with market execution. Execution Criteria We will determine the relative importance of the above Best Execution Factors by using our commercial judgment and experience in the light of the information available on the market and considering: a) the characteristics of the client, including the categorization of the client as retail or professional; b) the characteristics of the client order; c) the characteristics of the financial instrument that is the subject of the order; Execution Venues For the purposes of orders for the financial instrument provided by the Company, the Company acts as principal and not as agent on the Client s APPTRADER 7
behalf; therefore the Company is the sole Execution Venue for the execution of the Client s order. The Client acknowledges that the transactions entered into with the Company for the financial instrument provided by the Company are undertaken through the trading platform of the Company. The Orders will be executed on an over the counter basis rather than on a regulated market or a Multilateral Trading Facility and the Client is exposed to a greater risk of a possible default of the counterparty (i.e. the Company). Specific Instruction - Where the client provides the Company with a specific instruction in relation to his/her/it order or any part of it, including selection of execution venues, the Company will execute that order in accordance with those specific instructions and, in doing so, it will have complied with its obligations to provide the best possible results to the extent that those instructions are followed. - However, the Company would like to warn its clients that any specific instruction may prevent the Company from taking the steps that it has designed and implemented in its execution policy to obtain the best possible result for the execution of those orders in respect of the elements covered by those instructions. - Trading rules for specific markets or market conditions may prevent the Company from following certain of the Client's instructions. Client Orders Execution When carrying out Client Orders the Company will satisfy the following conditions: APPTRADER 8
a) ensure that orders executed on behalf of Clients are also promptly and accurately recorded and allocated; b) carry out otherwise comparable Client orders sequentially and promptly unless the characteristics of the order or prevailing market conditions make this impracticable; c) inform you about any material difficulty relevant to the proper carrying out of orders promptly upon becoming aware of the difficult. Consent The Company is obliged to obtain prior consent of the client before executing orders in financial instruments under its Order Execution Policy. The client must grant The Company its prior express consent to execute orders in certain financial instruments. By signing the agreement, which includes the investment mandate and the Order Execution Policy as appendices, the client gives express consent to the Order Execution Policy. Policy s amendment The Company reserves the right to review and/or amend its Policy and arrangements whenever it deems this appropriate according to the terms of the client agreement between the client and the Company. For any further information and/or have any questions about this policy please direct your request and/or questions to info@apptrader.com APPTRADER 9