BTEX permits block trading of U.S. Government securities futures contracts as part of its progressive rules. Block trades are defined as off-exchange trades with a minimum size of 250 contracts consummated between two parties whereby at least one party to the transaction is a Clearing Member of BTEX or both parties to the transaction are customers of a Clearing Member or its affiliate.
The block trading rule is designed to facilitate:
- Large lot order trading directly between major dealers who are Clearing Members and their customers or between customers and their Futures Commission Merchant acting as an intermediary.
- Single price execution of large lot orders.
| Number of Contracts | Reporting Time |
| 250 to 999 | 15 minutes |
| 1,000 to 2,499 | 30 minutes |
| 2,500 to 4,999 | 60 minutes |
| 5,000 to 9,999 | 120 minutes |
| 10,000 and above | 240 minutes |
These reporting times are the most flexible amongst all the major U.S. futures exchanges and are intended to accommodate the needs of large institutional users. The reporting times are in trading session minutes. Prices reported for block trades do not trigger contingent orders pending in the BTEX Trading System.. Procedures/Process Flow:
On consummation of a block trade, and subject to BTEX' block trade reporting time frames, the Clearing Member or its affiliated Member (or any affiliate of the Clearing Member that has been authorized by the Clearing Member or its Affiliated Member to report a Block Trade to BTEX on its behalf) must report the Block Trade details to BTEX. In the case where both parties to the transaction are customers of a Clearing Member or its affiliated Member, the Clearing Member or its affiliated Member must report the block trade details to BTEX. In the case where both parties to the transaction are Clearing Members, the seller of the transaction must report the block trade details to BTEX.
The block trade details to be reported must include:
- Quantity
- Contract
- Contract month
- Price
- Time and date of execution
- Buying/selling clearing firm number
- Buying/selling trader ID
The web application will disseminate the block trade information to a window on the BTEX website that displays all block trades reported that trading day. The window will show in chronological order all executed blocks, including quantity, contract, contract month, price and time and date of execution.
On the date that the block trade is reported to BTEX, both the buyer's and the seller's clearing firm will input the details of the trade into BrokerTec Clearing Company's OTIS application for matching. The trade details required to be input include:
- Quantity
- Contract
- Contract month
- Price
- Time and date of execution
- Buying/selling clearing firm number
- Buying/selling trader ID.
