Trading and Orders

Trading Mechanism

Overview

Trading Processes

With HKATS, orders are placed electronically into the Central Orderbook . The system automatically matches the corresponding buy or sell orders in real-time based on price/time priority. The executed trade is reported back to the Trader who can then confirm the trade immediately with his client. At the same time, the trade information, depending on what product the trade relates, is transmitted to the HKFE Clearing Corporation Ltd (HKCC) or The SEHK Options Clearing House Ltd (SEOCH) where appropriate for registration and clearing.

The process is expressed diagrammatically as follows:

|1 Client places order with |2 Trader enters client’s |3 Buy/sell orders are matched |A Executed non-Stock Options |

|Trader |order into the market through|based on price/time priority |trades are electronically |

| |HKATS workstation |on HKATS |transmitted to the HKCC for |

| | | |registration and clearing |

| | | | |

| |5 Trader can report the |4 Executed trades are |B Executed Stock Options |

| |executed trade to client |transmitted to HKATS |trades are electronically |

| |immediately |workstation in real-time |transmitted to the SEOCH for |

| | | |registration and clearing |

Order Types Available

1. Auction Orders

Auction orders are placed without a limit price and are only for the pre-market opening period. An auction order is an order to buy or sell in the market at the COP. All auction orders...