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Keep on the Book Function ("BK")
Is this a function I need to know about? If you do not manually route your orders or don’t care about the trading rebate from Track ECN, then you do not have to concern yourself with this function. What is the Keep on the Book Function? The Keep on the Book Function ("BK" for short) is a trading function available on all recent versions of myTrack. BK allows you to ensure that an order you route to Track ECN hits the ECN’s book and gets posted, as opposed to being filled right away. Why would I want to keep my order on Track ECN’s book? Posting your order on the book means you are adding liquidity to Track ECN, which qualifies you for an upfront rebate of $2.30 per thousand shares of NASDAQ stock. If your order was filled immediately against an existing order on the ECN’s book (or sent out to be filled by another ECN or Market Maker), you would be subtracting liquidity, which would cost you $2.90 per thousand shares of NASDAQ stock. So how does it work when I route an order to Track ECN? On many orders manually routed to Track ECN, having the BK function enabled won’t make a noticeable difference. Here is an example of a Limit Order routed to Track ECN: You have the BK function enabled and are routing to Track ECN. Stock ABCD is trading at $10.00 by $10.05 on Track ECN If you place a limit order to buy the stock at $10.01, your order will be posted on Track ECN and ABCD will now be trading at $10.01 by $10.05. (And if your order is filled, you’re entitled to the rebate.) In the example above, the Limit Order price was within the inside market when it was received, so the BK function had no effect.
What if I enable BK but my limit price entitles my order to be executed immediately against an order that’s already posted on the ECN’s book? In this instance, having the BK function enabled will have a noticeable effect: we’ll change the price of your order so it isn’t immediately executed. Your enablement of the BK function is your request that your order be posted on Track ECN and remain eligible for the rebate; this request overrides the price you have indicated, although your limit is still in effect. An example: You have the BK function enabled and are routing to Track ECN. Stock ABCD is trading at $10.00 by $10.05 on Track ECN If you place a limit order to buy the stock at $10.06, the price of your order will changed to $10.04 and then be posted on Track ECN, where ABCD will now be trading at $10.04 by $10.05. (And if your order is filled, you’re entitled to the rebate.) If no one hits your order and the ask price rises to $10.06, we will change the price of your order to $10.05. We’ll continue to keep your order one penny below the ask until your order is filled or cancelled, and only as long as "one penny below the ask" does not exceed your original limit price. As you can see, we don’t change the price of all orders, just buy orders at or above the ask and sell orders at or below the bid. These are orders that would normally result in an instant execution and therefore no rebate. IF YOU DO NOT WANT US TO CHANGE YOUR PRICE, BE VERY CAREFUL USING THE BK FUNCTION, SINCE PERMISSION TO CHANGE YOUR PRICE IS IMPLIED IN ITS USE. What if I want to use the BK function for a Market Order? You can send Market Orders. The results will be similar to sending a Limit Order that’s entitled to immediate execution (see previous question), with one exception: your order will be pegged one penny below the ask (for a buy) or one penny above the bid (for a sell) and will move up and down as the market fluctuates, without any limit. An example: You have the BK function enabled and are routing to Track ECN. Stock ABCD is trading at $10.00 by $10.05 on Track ECN If you place a Market Order to buy the stock, the price of your order will initially be set by us at $10.04 and then be posted on Track ECN, where ABCD will now be trading at $10.04 by $10.05. If no one hits your order and the ask price rises to $10.07, we will change the price of your order to $10.06. We’ll continue to keep your order one penny below the ask until your order is filled or cancelled. What if I enable BK but my limit order just sits on the ECN’s book, unexecuted? If your order is a day order, it will be canceled at 4 pm (unless it’s a shortened trading day). If your order is a good-till-canceled order, it will be canceled at 4 pm and re-entered the next morning. This will continue until the order is executed, cancelled by you, or expires. Does BK work for all ECNs? No, only for Track ECN. Is BK an automatic function? No, BK must be enabled by you on an order you route to Track ECN. How do I enable BK? On your myTrade screen, under the quantity box, is a small white box under the letters BK. If you click on it, you’ll see a checkmark, and BK will be enabled. Please note: once the BK function has been enabled , it will remain so until removed by clicking the BK box again to remove the checkmark. But I don’t see the BK box on my myTrade screen. There are two possibilities if you don’t see the BK screen. First, the system may not be anticipating an equity trade. You should select which account you’re going to make a trade and then, for Trade Type, select Stock. If you still don’t see a BK box, then you probably have an older version of myTrack. You can upgrade by clicking here.
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