Best Execution

Note: The English version of this agreement is the governing version and shall prevail whenever there is any discrepancy between the English version and the other versions.

  1. Purpose

    The purpose of this policy is to establish effective arrangements for obtaining, when Nextrade Worldwide Limited, hereafter the “Company”, is executing clients’ orders, the best possible result for its clients. Nextrade Worldwide Ltd is a financial services company which is authorised and regulated by the Cyprus Securities and Exchange Commission (License No. 229/14).

    This document aims to set out those arrangements and to ensure compliance with legislative requirements and the departmental and general procedures, which are set within this Internal Procedures Manual.

  2. Legal Framework

    In accordance with the Investment Services and Activities and Regulated Markets Law of 2007, The Company takes all reasonable steps to obtain, when executing orders, the best possible result for their clients taking into account price, costs, speed, likelihood of execution, size, nature or any other consideration relevant to the execution of the order, taking into consideration a clients’ ability, needs and trading policies, where applicable and possible. Nevertheless, whenever there is a specific instruction from the client, the Company shall execute the order following the specific instruction.

  3. Policy

    The Dealing Room is the relevant department to which the order execution policy mainly applies. Senior Management shall review this policy on an annual basis or / and whenever a material change occurs that impacts the Company’s ability to continue offering best execution of its clients’ orders using the Company’s trading platform.

    The policy outlines the process that the Company follows in executing trades, and assure taking all reasonable steps to consistently obtain the best possible result for clients through its order execution policy. It is noted however that when executing an order following a specific client instruction, the Company will execute the order in line with those instructions and will consider that it has discharged its best execution obligations.

    1. Best Execution Criteria

      The Company will take into account the best execution criteria for determining the relative importance of the execution factors:

      • The characteristics of the client
      • The characteristics of the client order
      • The characteristics of the financial instruments that are the subject of that order
      • The characteristics of the execution venues to which that order can be directed.

      The best possible result will be determined in terms of the total consideration, representing the price of the contract and the cost related to execution. The other execution factors of speed, likelihood of execution size, nature or any other relevant consideration will, in most case, be secondary to price and cost considerations, unless they would deliver the best possible result for the client in terms of total consideration.

      The Company determines the relative importance it assigns, in accordance with the below criteria, to the Best Execution Factors by using its commercial judgment and experience in light of the information available on the market and taking into account the remarks included in Section 3 of this policy. The Company assigns the following importance level to the Best Execution Factors:

      Price High The Company gives strong emphasis on the quality and level of the price data that we receive from external sources (i.e. Execution Venue) in order to provide our Clients with competitive price quotes.
      Costs High The Company takes all reasonable steps to keep the costs of your transactions as low and competitive, to the extent possible.
      Speed High Execution speed and the opportunity for price improvement are critical to every trader and we repeatedly monitor this factor to ensure we maintain our high execution standards.
      Likelihood of Execution High Even though we reserve the right to decline a Client order we aim to execute all Client Orders, to the extent possible
      Likelihood of Settlement Medium See relevant description in Section 3 l).
      Size of Order Medium See relevant description in Section 3 h).
      Market Impact Medium See relevant description in Section 3 m).
      Nature of Order Medium See relevant description in Section 3.j).

    2. Execution Factors

      The Company, when managing client’s orders takes into account various execution factors, provided that there are no specific instructions from the client to the Company about the way of execution of the orders. The execution factors include:

      • Price
      • Speed and likelihood of execution
      • Costs or commissions
      • Size and nature of the order
      • Market conditions and variations
      • Execution capability
      • Any other direct consideration relevant to the execution of the order
    3. Specific Instructions

      In circumstances where the client provides the Company with a specific instruction as to how to execute an order and the Company has accepted this instruction, then the Company will execute the order in accordance with that specific instruction.

      Important Warning: Nevertheless, if the client provides a specific instruction to carry out an order, then by executing that order the Company will be complying with the Company’s duty to provide the client with best execution. This may result in being unable to follow the Company’s order execution policy for that particular order.

    4. Execution Venues

      Execution venues are the entities to which the orders are placed or to which the Company transmits orders for execution. The Company does not execute Client Orders in Financial Instruments on an own account basis, as principal to principal against the Client. The Company uses third party Financial Institution as Execution Venue. The Execution Venue for clients’ orders is NXB Financial Services Ltd a duly authorised and regulated investment firm. The Company evaluates and selects the Execution Venue based on a number of criteria including but not limited to the regulatory status of the institution, the ability to deal with large volume of Orders, the speed of execution, the competitiveness of commission rates and spreads.

      Where there is only one possible Execution Venue, best execution is achieved by execution on that venue. Best execution is a process, which considers various factors, not an outcome. This means that, when the Company is executing an order for a Client, the Company must execute it in accordance with its execution policy. The Company does not guarantee that the exact price requested will be obtained in all circumstances and, in any event, the factors may lead to a different result in a particular transaction.

      The Execution Venue may be changed at the Company’s discretion by giving at least one (1) business day prior notice to the Clients on the Website.

      In particular, the client deposits funds with the Company and places an order via a trading platform and the Company is responsible for the safeguarding of clients’ funds in segregated accounts. Upon receipt of the order, the Company opens an identical order in its name with the market maker, per order received or accumulatively. In this respect, the Company executes the client‘s order by acting as a riskless principal (i.e. enters into true back to back trades).

      The Client acknowledges that the transactions entered in Financial Instruments with the Company are not undertaken on a recognized exchange/regulated market, rather they are undertaken over the counter (OTC) and as such they may expose the Client to greater risks than regulated exchange transactions/Orders.

    5. Financial Instruments

      The Company executes client orders in relation to the following Financial Instruments:

      • Binary options in stocks, commodities, indices and currency pairs
      • Contracts for Differences (“CFDs”) in stocks, commodities indices and currency pairs (“Forex”)

      Binary Options and CFD’s shall be collectively referred to as financial instruments in this policy.

      Different types of trading accounts:

      The Company offers different types of Trading Accounts, for example; VIP, Platinum, Gold and Silver etc. In this respect, the initial minimum deposit may differ according to each type of Trading Account. Information regarding the different types of Trading Accounts offered can be found on the Company’s website here.

      Different Types of Financial instruments:

      The Company offers different types of financial instruments, for example; Binaries; Up/Down, KIKO Pairs; Fixed, Floating Forex/CFD Up/Down etc. In this respect, the minimum/maximum size of an Order, the percentage of return, etc. may differ according to each type of Binary Option Information regarding the different types of Binary options can be found on the Company’s website here.

    6. Pricing

      For any given Binary Option, the Company will quote one price at which the Client can open an Order. The types of Binary Options offered by the Company from time to time are disclosed on the Company’s website and/or trading platform. The Company will quote to Clients the price provided by the Execution Venue The Execution Venue calculate and provide their own tradable prices for a given Binary Option by reference to the BID and ASK prices of the relevant underlying asset, which the Execution Venue obtain from third party reputable external reference sources (i.e. price feeders). The Company’s prices can be found on the Company’s trading platforms. The Company updates its prices as frequently as the limitations of technology and communications links allow.

      The main way in which the Company will ensure that the Client receives the best price will be to ensure that the calculation of the quoted price is made with reference and compared to a range of underlying price providers and data sources. The Company reviews regularly or at least once a year its Execution Venue to ensure that relevant and competitive pricing is offered.

      Despite the fact that the Company takes every reasonable step to obtain the best possible result for its Clients, it does not guarantee that when executing an Order its price will be more favourable than one which might be available elsewhere.

      The price for a given type of Binary Option is calculated by reference to the price of the relevant underlying asset, which the Company obtains from third party external reference sources.

      Under certain trading conditions, such as under high volatility causing rapid price fluctuations, the Company might not be in a position to execute the order placed by the client and/or at the client’s requested price. Under this scenario, the Company maintains the right to execute the order at the first available price.

      You are warned that Slippage may occur/apply when trading in any financial instrument. This is the situation when at the time that an Order is presented for execution, the specific price showed to the Client may not be available- So, Slippage is the difference between the expected price of an Order, and the price the Order is actually 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. Please be advised that Slippage is a normal element when trading in Binary Options. Slippage more often occurs during periods of low liquidity, high volatility (for example due to news announcements, economic events and market openings and other factors) and large market orders that making an Order at a specific price impossible to execute. In regards to a given FX Contracts (“FX”) or Contracts For Differences (“CFDs”) financial instrument the Company quotes the higher price at which the client can buy, thus going long (“ASK”) and the lower price at which the client can sell thus going short (“BID”) the relevant FX or CFD. The difference between the BID and ASK of a given FX or CFD is called the spread, which can vary with the different types of accounts in FX and CFDs.

      If the price reaches an Order set by you such as: Stop Loss, Take Profit, and then these Orders are automatically executed. However, under certain trading conditions it may be impossible to execute Orders (Stop Loss, Take Profit) 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, for a given CFD, is specified in the Client Agreement and/or the Company’s website.

      Under certain market conditions, particularly those of high volatility and/or low liquidity the Company maintains the right to limit or prevent changes in “Stop Loss” or “Take Profit” Parameters. Under such conditions, the Company may also change without notice the amount of Leverage it is prepared to offer Clients.

    7. Costs

      When the client opens a position in some types of financial instruments a commission or a financing fee will apply. Financing fees may apply for some types of financial instrument subject to “rollover”, “margin”, “carry trade”, overnight, fees throughout the life of the displayed on the website. The commission and financing fees are not incorporated into the Company’s quoted prices and are instead charged explicitly to the Client account. The Company reserves the right to charge any such fees where applicable or where insufficient funds to cover any fees, the Company shall close all open positions related to CFD’s.

      Should the Company at any period of time decide not to charge such costs, it shall not be construed as a waiver of its rights to apply them in the future, with prior notice to the Client. Such notice may be sent personally to the Client and/or posted on the Company’s website.

      Commissions: Commissions may be charged either in the form of a percentage of the overall value of the trade or as fixed amounts. More information on commissions can be found on the Company’s website.

      Financing Fee: In the case of financing fees, the value of opened positions in some types of CFDs is increased or reduced by a daily financing fee “swap rate” throughout the life of the CFD (i.e. until the position is closed). Financing fees are based on prevailing market interest rates, which may vary over time. Details of daily financing fees applied are available on the Company’s website.

    8. Size of order

      All orders are placed in monetary value. The client will be able to place an order as long as there is sufficient balance on the trading account The Company strives to fill all orders of all sizes, however due to market liquidity at the time of execution, the price given may be different from the declared price. The Company may also limit the maximum volume of a single transaction depending on the available liquidity.

    9. Speed

      Obviously, prices change over time. The frequency with which they do varies with different financial instruments and market conditions. Considering that the tradable prices which are distributed via the Company’s trading platform/terminal, technology used by the client to communicate with the Company plays a crucial role. For instance, the use of a wireless connection, or dial up connection, or any other communication link that can cause a poor internet connection can cause unstable connectivity to the Company’s trading platform/terminal. The result for the client is to place his orders at a delay and the order to be executed at better or worse prevailing market price offered by the Company via its platform/terminal.

    10. Nature of the order

      The particular characterizing of an order depends on the financial instrument to be selected by the client. The value is mainly depended on the volatility of the underlying instrument, the expiration and the risk management to be selected by the client.

      Types of Order(s) in Trading in CFDs/Forex:

      The particular characterising of an Order may affect the execution of the Client’s Order. Please see below the different types of Orders that a Client can be placed:

      Take Profit

      Take Profit Order is intended for gaining the profit when the CFD’s price has reached a certain level. Execution of this Order results in complete closing of the whole position related to the market 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 below the current Bid price), and it does with Ask price for short positions (the order is always set above the current Ask price).

      Stop Loss

      Stop Loss Order is used for minimising of losses if the CFD’s price has started to move in an unprofitable direction. If the CFD’s price reaches this stop loss level, the whole position will be closed automatically. Such Orders are always related to the market 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).

    11. Likelihood of execution

      Due to the levels of volatility affecting the underlying instrument’s price, the Company seeks to provide client orders with the fastest execution reasonably possible.

      The Company arranges for the execution of Client Orders with third party(ies) (i.e. Execution Venue); hence, execution may sometimes be difficult. The likelihood of execution depends on the availability of prices of the Execution Venue(s). In some case it may not be possible to arrange an Order for execution, for example but not limited in the following cases: during news times, trading session start moments, during volatile markets where prices may move significantly up or down and away from declared prices, where there is rapid price movement, where there is insufficient liquidity for the execution of the specific volume at the declared price, a force majeure event has occurred.

      In the event that the Company is unable to proceed with an Order with regard to price or size or other reason, the Order will not be executed. 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 transmit or arrange for the execution of any Order or Request or Instruction of the Client in circumstances explained in the Client Agreement found.

    12. Likelihood of settlement

      The Company shall proceed with the settlement of all transactions upon the execution and/or time of expiration of the specific transaction.

      The Financial Instruments of CFDs offered by the Company do not involve the physical delivery of the underlying asset, so they are not settled physically as there would be for example if the Client had bought shares. All CFDs are cash settled.

    13. Market Impact

      The Company’s quoted prices which are derived from its independent price providers may be affected by various factors which could also affect the above mentioned factors. The Company will take all reasonable factors to ensure the best possible result for its clients.

      The Company does not consider the above list exhaustive and the order in which the above factors are presented shall not be taken as priority factor.

    14. Client Consent

      Appropriate information is provided to the client on the content of the execution policy. The prior consent of the client is obtained regarding the documented Best Execution Policy to be followed. In addition, a clear and prominent warning is disclosed to the Company’s clients (within the Terms of Use) that any specific instruction from a client may prevent the Company from taking the steps that is has designed and implemented in its execution policy for obtaining the best possible result for the execution of those orders in respect to the elements covered by those instructions.

      Adequate information is provided to the clients through this policy in relation to the factors that are taken into consideration by the management when handling clients’ orders. Also, the policy is reviewed periodically by the Company and the clients are informed accordingly in relation to any material changes.

View desktop version
© 2015 Stockpair