How To Example: Create a forward contract. It transaction that can be used to create a Forward Contract in Kodiak Derivatives. It is possible to allocate a client orders as a transaction for a Forward Contract in Kodiak OMS.
Kodiak OMS users that want to trade forward contracts in Kodiak OMS have to enable the “Forward Contract” functionality in the Kodiak Settings Window. Users must click on the Enable Forward settlement by clicking the check box. The users must choose the banks forward settlement portfolio.
Picture: Kodiak Settings Window
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Step 1. Create and send a client order “as forward”
Picture: Create Client Order Window
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Step 2. The Order is executed on the market. The client order gets a new Workflow status: Allocation Ready
Picture: Client orders grid view
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Step 4. The “Is Forward Contract” should be checked.
Result: Forward contract details appear on the right side.
Picture: Allocation Window
Step 6. Fill out the details, Interests: 10%, Interest fee: 5, Expiry date: Today + 1 month.
Press the “Add” button to add to the allocation grid and then press “Send” to send the order to
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- Hedging leg has been sent to the back office: An allocation has been sent to the back office. Now the BO can settle the trade to/from the banks forward contracts portfolio.
- Forward contract leg: A forward transaction has been sent to Kodiak Forward Contracts for further processing.
Create The Forward Contract
Step 7. Start Kodiak Forwards client.
Step 8. Press “Search Transactions” button and find the transaction from Kodiak.
Step 9. Right click on the transaction and choose “Create contract”
Picture: New Contract Window
Result: The “New contract” window should appear
Step 10. Choose an Expiry date and enter the forward interests and the interest fee:
Press the “New Contract” button.
Result: The “New contract” window closes.
A new contract appears in the forward contracts grid. The Contract State should be
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The transaction should now be visible in the Transactions table in Kodiak Derivatives Client and the contract can be created from there.
MiFID
When the "Is Forward Contract" checkbox is selected, the system handles the contract as a forward contract under MiFID regulations. This means that MiFID categorises the contract appropriately based on its forward nature, distinguishing it from regular contracts where the checkbox is not selected.
Picture: Create Client Order - regular contract MiFID
Picture: Create Client Order - forward contract MiFID