Best Execution Policy
FXON employs a policy of optimal execution intended to execute orders from customers in optimal and fair ways. We strive to execute trade orders from customers in accordance with the following policies.
A trading method executed to hedge excessive risk against optimal trading conditions
FXON offers a trading system that automatically executes customer's trade orders for each instrument (currency pair, cryptocurrency, indices, stocks, metals, or energy) and account type (standard, elite, or P2P) by either (A) matching of buy and sell orders among clients using an independent dark pool ("FX marriage" hereinafter) or (B) coverage transactions with multiple liquidity providers, aggregators, etc. (hereinafter "LPs") when the customer's net position reaches or exceeds a predetermined level. Each transaction is monitored to avoid the risk of excessive fluctuation in market prices in relation to the customer's positions, while also eliminating conflicts of interest with customers.
Ordering method (A)
Customer's orders offset by linking sell orders with buy orders for the same instrument. If buy and sell orders are received for the same quantities, covering trades are not conducted because the exchange-rate risk is zero. In this way, we can generate returns from portions with no exchange-rate risk.
110.832-110.827 = 0.005
20,000×0.005 = JPY 100
Ordering method (B)
To avoid foreign-exchange risk when customer's orders cannot be offset against each other, we engage in covering transactions with partner LPs. While our earnings come only from the difference in amounts between the rate approved by the covered financial institutions and our rate, cover transactions make it possible to avoid foreign-exchange risk.
(110.832-110.831)+(110.827-110.826) = 0.002
20,000×0.002 = JPY 40
Order execution method
FXON receives and executes orders from clients as descried below.
FXON offers a trading system that automatically executes the customer's trade orders. For each instrument (currency pair, cryptocurrency, indices, stocks, metals, or energy) and account type (standard, elite, or P2P) either (A) matching of buy and sell orders among clients using an independent dark pool ("FX marriage" hereinafter) or (B) coverage transactions with multiple liquidity providers, aggregators, etc. (hereinafter "LPs") is conducted when the client's net position reaches or exceeds a predetermined level. Each transaction is managed to avoid the risk of excessive fluctuation in market prices related to the customer's positions, while eliminating conflicts of interest with clients.
Market buy order
Market sell order
Limit order is a method of ordering by designating in advance a price at which one wishes to trade. The order is executed automatically when the rate reaches the designated price. There are two types of limit orders: buy limit orders and sell limit orders. A buy limit order is placed by issuing a buy order specifying a price lower than the current market price, while a sell limit order is placed by issuing a sell order, specifying a price higher than the current price. This ordering method is used to order at a desired price in the same direction as current trends. While limit orders make it possible to execute trades at desired prices, if the market moves in a different direction than anticipated, the order will not be executed until the designated price is reached.
Sell limit orders
Buy limit orders
The opposite of limit orders, which follow current trends when placing orders, stop orders are placed counter to the market trends. A buy stop order designates a price higher than the current price, while a sell stop order designates a price lower than the current price. This ordering method is used when counter to current trends, in order to catch future reversal in trends. Since, like limit orders, stop orders are placed by specifying a desired price in advance, they offer the advantage of automatic execution, when the desired price is met, even if the investor is not constantly watching the market.
Buy stop orders
Sell stop orders
Settlement OCO order
A Settlement OCO order is a method where two settlement orders are placed simultaneously for a position held, and then when one of the settlement orders is executed, the other is automatically cancelled. Since a settlement OCO order makes it possible to take profits (T/P) and stop losses(S/L) in advance, it enables risk management, even when the client is not monitoring the market conditions. For example, when buying dollars at the exchange rate USD 1=JPY 110, setting T/P at USD 1 = JPY 111 and S/L at USD 1 =JPY 109 makes it possible to secure profits while avoiding large losses.
Settlement OCO order
An IF-DONE order is a method of issuing a take-profit (T/P) or a stop-loss (S/L) order when placing a new limit order (or a stop order). For example, if the current exchange rate is USD 1＝JPY 110, the order and settlement can be configured in advance so that a buy order will be executed at USD 1＝ JPY 111 and a sell order for the position at USD 1＝JPY 112 to secure profits. Similarly, S/L can be set once in the same way when placing a new order to limit losses.
IF-DONE order (T/P)
IF-DONE order (S/L)
IF-DONE OCO order (If Done, One Cancels the Other)
An IF-DONE OCO order--also known as an IFO order--is a method of ordering that combines an IF-DONE order with an OCO order. An IF-DONE OCO order is an effective way of taking profits and stopping losses at levels configured in advance, by issuing a take-profit (T/P) and a stop-loss (S/L) order simultaneously when placing a new limit order (or a stop order). For example, when placing a new order at USD 1 = JPY 111 and setting T/P at JPY 112 and S/L at JPY 110, when the rate reaches JPY 112 profits are secured and the S/L is automatically cancelled.
IF-DONE OCO ordering