Fact Book 2005 - NASDAQ OMX Trader Nordic

Trading on the Exchange and indices
Trade types
The private investor can trade listed shares, bonds and
investment certificates in many different ways. You can agree
with your bank to trade immediately, to trade at the average
price of the day or choose to have the order placed directly in
the trading system so that it may be executed as a so-called
order book trade. Via webbanking, you can also place buy
and sell orders in the trading system directly on the
Copenhagen Stock Exchange via the Internet - naturally, this
is also an order book trade.
Order book trading
It is only possible to trade directly in the Exchange's trading
system through a member of the Copenhagen Stock
Exchange. The members include Danish and foreign banks
and brokers. A member firm may on its own behalf or at the
request of a customer place orders directly in the trading
system.
Private investors can also gain access to the trading system,
for instance via webbanking, and thus trade directly on the
Exchange. Practically all member firms that offer securities
trading to private customers give their customers the
opportunity to place orders themselves in the trading system
via webbanking.
With order book trading the order is certain to be placed in
the trading system and, consequently, on the market directly.
The investor has decided on a highest buying price or lowest
selling price. This is a limited order. A limited order ensures
that you do not trade at a price that is inferior to the one you
fixed yourself. The trade itself is executed the moment an
opposite order at the same or a better price is placed in the
trading system. Consequently, if there are no matching
orders in the trading system, no trade is executed.
Trade executed immediately
As a private investor you can also choose to arrange with
your bank to execute a trade immediately when you are
buying or selling shares, investment certificates and bonds.
This means that you trade directly with the bank against its
own portfolio of securities. Settlement must comply with the
rules on 'best execution' in pursuance of the Exchange's
Rules of Ethics. This, for instance, means that the price must
be equal to or within the spread (the difference between the
best bid and offer) in the Exchange's trading system - for
shares up to 250 round lots (up to approx. DKK 5 million) or
bonds for up to DKK 3 million. If there is no spread, the order
must be executed at the best possible price for the customer.
Where a member firm has executed a trade outside the
trading system, the member firm must report that trade to the
Copenhagen Stock Exchange within five minutes, and trades
are immediately made public. However, trades in
government bonds of more than DKK 3 million are not
published until after the closing of the trading system at
17:00. Trades in mortgage bonds and other bonds of DKK
200 million and more may be delayed by 20 minutes by the
member. However, such trade is not published later than
immediately after the closing of the trading system.
Securities dealers who are not members of the Copenhagen
Stock Exchange must report their trades in listed securities
on the subsequent trading day before continuous trading
begins.
Average price trade
A private investor can also choose to arrange with his bank
to trade at an average price. This means that as a customer
your trade is settled on the basis of one of the average prices
that are calculated by the Copenhagen Stock Exchange. An
average price is calculated as a turnover-weighted price
average of all trades concluded between 9:00 and 15:30 or
9:00 and 17:00.
When an investor trades at an average price, he/she is
trading with the bank itself, which trades and settles against
its own portfolio based on the average price.
Auction price trade
On the bond market the Copenhagen Stock Exchange has
an auction functionality in the trading system where issuers,
including mortgage members, can hold auctions in the new
36 KØBENHAVNS FONDSBØRS FACT BOOK 2005