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Crossing (One user sells & another buys, with spread )

Questions about updating prices or transactions in Fund Manager

Postby newuser2017 » Mon Oct 16, 2017 6:15 am

Hi, we are sampling software to use in our investment club.
We have times where we want to trade one bond from one user to the another as a cross.
This we do at the market quoted bid and offer price. The spread we retain as a profit for the Club's operation.
How should we operate the transactions. Do we need to do three steps (user#1 sells, user #2 buys and counterpart for both users via treasury, where profit taken between prices).
Thanks for help.
newuser2017
 
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Postby Mark » Mon Oct 16, 2017 9:00 am

Hi newuser2017,

Your suggestion sounds correct. I'm not sure how you're tracking everyone, but I would imagine each member has their own sub-portfolio. You would record that member's transactions in their sub-portfolio, as they happened. So, in this case, one member would have a buy, and the other would have a sell, at slightly different prices.

How are you tracking the club's profits? It sounds like the club has its own sub-portfolio. You could then record the opposite sell/buy, so the club ends up owning 0 shares, but it realized a profit due to the price differences.
Thanks,
Mark
Fund Manager - Portfolio Management Software
Mark
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