Direct Edge will introduce Midpoint Discretionary Orders (MDO) in the EDGA Exchange, effective Wednesday, July 18, 2012. This new, innovative order type offers the opportunity to receive a full rebate at its displayed price and a reduced fee if executed within its discretionary range.
MDOs are displayed orders on the EDGA book that are pegged to the NBBO with a non-displayed discretionary component that can extend to the midpoint of the NBBO. MDO orders can be entered with or without a limit price.
Any execution that occurs in the discretionary range, including at the midpoint, will have a discounted rate of $0.0005 per share. MDO orders on the book that are executed at the NBBO will receive the standard rebate of $0.0003.
How to Enter an MDO Order
- In FIX, this order type will be triggered with Tag 18 = d (Midpoint Discretionary Order) and Tag 40=P (Pegged).
- In the XPRS API, this order type will be triggered by entering “D” (Midpoint Discretionary Order) in the Special Order Type field and “Y” in the Display field.
New Flags to Support MDO Transactions
The following flags will be introduced on July 2, 2012 to support MDOs, pending Securities and Exchange Commission (SEC) approval.
Flag |
Description |
Fee |
DM |
Non-Displayed Orders, adds liquidity (using Midpoint Discretionary order type) |
$0.0005 |
DT |
Non-Displayed Orders, removes liquidity (using Midpoint Discretionary order type) |
$0.0005 |
More Information
- Refer to the MDO Fact Sheet for more information as well as examples of possible MDO executions.