Clearing Mechanism
A Clearing Member's open position is arrived by aggregating the open position of all the Trading Members (TM) and all custodial participants clearing through him. A TM's open position in turn includes his proprietary open position and clients’ open positions.
Proprietary / Clients’ Open Position
While entering orders on the trading system, TMs are required to identify them as proprietary (if they are own trades) or client (if entered on behalf of clients) through 'Pro / Cli' indicator provided in the order entry screen. The proprietary positions are calculated on net basis (buy - sell) and client positions are calculated on gross of net positions of each client i.e., a buy trade is off-set by a sell trade and a sell trade is off-set by a buy trade.
Open Position
Open position for the proprietary positions are calculated separately from client position.
For example,
For a CM - XYZ, with TMs clearing through him - ABC and PQR
| Proprietary Position | Client 1 | Client 2 | Net Member position | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Contract | |||||||||||
| TM | Security | Buy | Sell | Net | Buy | Sell | Net | Buy | Sell | Net | |
| ABC | USDINR January contract | 4 | 2 | 2 | 3 | 1 | 2 | 4 | 2 | 2 | Long 6 |
| PQR | USDINR January contract | 2 | 3 | (1) | 2 | 1 | 1 | 1 | 2 | (1) | Long 1 Short 2 |
XYZ’s open position for USDINR January contract is :
| Member | Long Position | Short Position |
|---|---|---|
| ABC | 6 | 0 |
| PQR | 1 | 2 |
| Total for XYZ | 7 | 2 |