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Stepper on the Czech RM-SYSTEM Stock Exchange

The main purpose of the Stepper intelligent order is to buy or sell securities at the best possible market price. The intelligence of the order is in its ability to place an order on the market that is slightly better than the best competing order, thereby achieving the best price on the market while avoiding inflating or decreasing the price of the security. This required minimum is called the step quotation.

The speed at which this order reacts to changes in the depth of the market is significantly higher than the speed of any human reaction.

The minimum allowable quotation step is determined by the liquidity band of the security and the interval in which the order price is located:

Quotation steps valid from 2 January 2018 for all markets

Liquidity bands for shares from the RM-SYSTEM Stock Exchange

  • When placing a Stepper intelligent order the Ignored Quantity parameter can be used as well.
  • A Stepper order cannot be combined with EasyClick and VNN parameters.

How does the order work?

Description of the Stepper intelligent order on the RM-SYSTEM stock exchange

  1. The investor enters a buy or sell Stepper intelligent order using the form for placing orders in the e-Broker application containing the market (RMS), security, total number of bought or sold shares, Limit Price, valid period and "STEPPER" must be entered as the order type. Ignored Quantity is an optional selection.
  2. The validation checker ensures that the investor is authorised to place such an order and if so, the order is placed on the market.
  3. If the intelligent order is accepted by the market, it is classified to the step above the best competing bid or the lower limit of the permitted price range if no other bid exists or is in the allowed price range. Competing bids are all of the auction orders with fixed Limit Prices and other Stepper orders with their own Limit Prices. As the market situation changes (e.g. when other orders with better prices that the currently shown Limit Price for the Stepper order are accepted), the Stepper automatically moves one step above the new order. The shift in price (up for a buy order or down for a sell order) is limited by the Limit Price of the order, i.e. if the market changes (competing bids) above the Stepper Limit Price, it remains at the depth of the market at its Limit Price.

Using the "Ignored Quantity" parameter

If the "Ignored Quantity" parameter is selected, the Stepper order will ignore the cumulative quantity that is less than or equal to the value defined as the Ignored Quantity.

If the price is higher on the offer side or lower on the bid side, the Stepper order will not move to the bids or offers shown. Stepper is placed at the depth of the market with a price that is always a step better than the best bid or offer while the cumulative value must be higher than the Ignored Quantity parameter.

The Ignored Quantity parameter is used primarily in order to prevent the investors order from being excessively pushed higher (for a buy order) or downwards (for a sell order) by a competing order with a negligible volume. This parameter is used with the Stepper intelligent order.


Order response in an auction

During the auction (auction opening, auction after expanding the allowed price zone or auction after the market is unblocked using a VNN order) the depth of the market is first determined from the limit prices of standard orders and then Stepper orders are added at the depth of the market at the current limit price calculated using the rules shown above. The auction then occurs.

Order response during continuous trading

When a new Stepper order is placed on the market, a calculation of all competing Stepper orders first takes place and then all changes are made at the depth of the market at once (including the addition of the new Stepper). If the bid and offer level cross, the individual Stepper orders are paired for trading based first on their currently defined prices depending on the time placed.


If a standard order with a limit price is placed on the market, Stepper orders are recalculated after it is placed, i.e. standard auction orders with Limit Prices take precedence over Stepper orders. If there is a bid Stepper order with a limit price that is paired to an existing bid (but the Stepper order on its side of the market shows a price that is one step better than a competing quote) and a standard order with a limit price appears on the market at a level that matches the existing offer, the standard order is paired with the offer (if the limit price is lower than the Stepper order).


If another Stepper order appears on the market, the limit price of the Stepper order is first calculated and if it has the same or higher limit price as a Stepper order submitted earlier, it gains precedence for subsequent paring.

Find a complete description of the Stepper order in the Trading Rules and Technical Operating Conditions for RM-SYSTÉM, česká burza cenných papírů, a.s.

Example buy Stepper order

The investor wants to purchase 2,500 shares of Erste Bank for CZK 846 per share using the "Ignored Quantity" parameter. Order validity is defined as one day.

  • Purchased quantity: 2,500 shares
  • Limit price: CZK 846
  • Ignored Quantity parameter: 250

MARKET BEFORE PLACING THE ORDER:

Price (CZK)Cumulative number of shares 
850,203 650Bid
850,003 500
849,001 800
848,60500
848,50320
848,50 Last trade
843,30100Offer
842,502 050
842,303 000
842,004 000
841,504 300

AFTER PLACING THE ORDER:

The investor's order is placed at the depth of the market in the first position above the offer as long as the cumulative quantity is higher than the entered Ignored Quantity parameter. The offer of 100 shares at CZK 843.30 is ignored.

Price (CZK)Cumulative number of shares 
850,203 650Bid
850,003 500
849,001 800
848,60500
848,50320
848,50 Last trade
843,30100Offer
842,602 600
842,504 550
842,005 500
841,506 500

AFTER AN OFFER CHANGE:

A new order for 1,000 shares at CZK 843.50 is placed. The quantity is higher than the entered ignored quantity so our order is placed one step above the best offer.

Price (CZK)Cumulative number of shares 
850,203 650Bid
850,003 500
849,001 800
848,60500
848,50320
848,50 Last trade
843,602 500Offer
843,503 500
843,303 600
842,505 550
842,306 500
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