“POST” vs. “NO POST” PRICE QUOTATIONS WITH THE BROKER

A “posted price” is a live dealable price given by a dealer to the broker and is intended to be broadcasted to all trading participants in a particular market. On the other hand, a “No Post” price, although unannounced is considered dealable. It will be dealt once the market reaches the “no post” price level.

A “No Post” price should NOT be announced by the broker. It can only be shown to the dealers who are quoting the best bid/offer price only if specifically instructed by the dealer quoting the “No Post” price.

If the posted price and the “No Post” price are the same, the posted price shall have the priority for deal execution since the quoting dealer with a “Posted” price took the risk of showing his position to the market. The “No Post” price dealer shall get the residual volume if the aggressor dealer’s volume is not fully satisfied from the posted price dealer.
An aggressor dealer who hits a posted price is committed to deal only up to the limit of the volume corresponding to the posted price shown by the broker.

Examples are as follows:

1) An aggressor dealer hits the posted bids: “YOURS ALL”

Bid prices are at equal levels and arranged according to the time they were relayed to the Broker:

Bid #1 “Posted Bid” for volume of 200 MM
Bid #2 “Unposted Bid” for volume 300 MM
Bid #3 “Posted Bid” for volume of 250 MM

The aggressor dealer done deals will be executed as follows:

Bid #1 “DONE” PhP 200 MM
Bid #3 “DONE” PhP 250 MM
Bid #2 Nothing done as the volume was not posted as the aggressor is only aware of a volume of PhP 450 MM and it was fully satisfied by posted bid volume

2) An aggressor dealer hits the posted bids for PhP500 MM: “YOURS FOR PHP500 MILLION”

Bid prices are at equal levels and arranged according to the time they were relayed to the Broker

Bid #1 “Posted Bid” for volume of 200 MM
Bid #2 “Unposted Bid” for volume 300 MM
Bid #3 “Posted Bid” for volume of 250 MM

The aggressor dealer done deals will be executed as follows:

Bid #1 “DONE” PhP 200 MM
Bid #3 “DONE” PhP 250 MM
Bid #2 “DONE” PhP 50 MM à last to be serviced since not posted. Amount dealt is the unsatisfied portion of the posted bids.

3) An aggressor dealer hits the posted bids for PhP 500 MM: “YOURS FOR PHP 500 MILLION”

Bid prices are at equal levels and arranged according to the time they were relayed to the Broker:

Bid #1 “Posted Bid” for volume of 100 MM
Bid #2 “Unposted Bid” for volume 200 MM
Bid #3 “Posted Bid” for volume of 100 MM

The aggressor dealer done deals will be executed as follows

Bid #1 “DONE” PhP 100 MM
Bid #3 “DONE” PhP 100 MM
Bid #2 “DONE” PhP 200 MM à last to be serviced since not posted. Amount dealt is the unsatisfied portion of the posted bids.

When a Posted Bid Price increases its volume size immediately after being hit by the aggressor dealer.

In the case of No. 3 example above, if Bid #1 is hit and quoting dealer says he can increase his volume to PhP500 million from the current PhP100 million, the additional PhP400 million shall be treated by the broker as a new and separate order. As such, it can only be executed after the bids of Bid #3 and Bid #2 are filled. The additional volume of Bid#1 is treated as an unposted bid volume.