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Market Model

Market Model

Trading on Eurex Bonds is based on a flexible market model in which quotes and orders are entered into a central order book. Liquidity is ensured by a number of participants who voluntarily act as Market Makers. Issuers receive regular reports about traded volumes and quoting performance of the Primary Dealer's, proving the fulfillment of their quoting obligations on the core European government bond markets.


During continuous trading, orders and quotes are executed on the basis of the principle of price/time priority, where the sequence of order entry determines execution priority for orders or quotes with the same price limit.

Our system also supports

 

Request for Quotes (RFQ)

Eurex Bonds is providing a Request for Quotes (RFQ) facility. Herein a registered Market Participant (requester) has the possibility to request quotes from one or many selected Market Participants (responders) in order to invite them into a bidding process to bid on an specific instrument. To submit such a request, the requester has to provide obligatory information, like

  • request to buy/sell
  • type of security
  • and volume,

which have to be provided before initiating an RFQ. Responders may respond with an offer including the same or smaller volume. The offer will be sent to the directly to the requester. The offer shall remain valid for a period to be defined by the responder (RFQ Wire Time) and cannot be cancelled. To respond to a request, the responder has to include the following obligatory information in his response:

  • buy/sell offer (bid/ask)
  • type of security
  • volume
  • price
  • wiretime

More detailed information and functional explanations can be found here.

The current values of all RFQ workflow related timers can be found here.

Iceberg orders

Our system also supports iceberg orders. With an iceberg order, only a certain part of the order quantity (the peak quantity) which can be defined by the participant entering the iceberg order is openly displayed in the central order book. Once the peak quantity has been executed, the system will automatically submit the next peak quantity to the central order book; this process is continued until the full order quantity has been executed, or the order is cancelled.


This enables the smooth execution of larger order sizes, without excessive market impact. To safeguard market transparency, the order book is dynamically updated, displaying up to ten best bid and ask prices, with aggregated order quantities for each limit in the book. Iceberg orders allow market participants to enter large orders without revealing the full volume to the market.

Pre-arranged Trade Facility

The “Pre-arranged Trade Facility” offers a feature in which trades (agreed upon outside of the platform) can be entered at Eurex Bonds, which will be processed via straight-through processing (STP) through Eurex Clearing.