# Going Short for Futures **URL:** \ **Category:** General Q&A\ **Tags:** imported, derivatives, xid\_168626\ **Created:** [December 13, 2005, 6:18am UTC](https://forum.fixtrading.org/t/going-short-for-futures/12558 "2005-12-13T06:18:01Z")\ **Posts on this page:** 7\ **Page:** 1
**Author:** ![tkch\_x](https://avatars.discourse-cdn.com/v4/letter/t/5f9b8f/32.png) [@tkch\_x](https://forum.fixtrading.org/u/tkch_x)\ **Post date:** [December 13, 2005, 6:18am UTC](https://forum.fixtrading.org/t/going-short-for-futures/12558/1 "2005-12-13T06:18:01Z")
Imported from previous forum ---
**Author:** ![tkch\_x](https://avatars.discourse-cdn.com/v4/letter/t/5f9b8f/32.png) [@tkch\_x](https://forum.fixtrading.org/u/tkch_x)\ **Post date:** [December 13, 2005, 6:18am UTC](https://forum.fixtrading.org/t/going-short-for-futures/12558/2 "2005-12-13T06:18:01Z")
Hi All, Since I’m green in the F&O so would like to ask for a basic question. When going short for a futures, what should be expected to send for the tag 54 side in a new order message? Is that a Sell (2) or Shortsell (5)? Thanks ---
**Author:** ![calvinlai\_x](https://avatars.discourse-cdn.com/v4/letter/c/b9bd4f/32.png) [@calvinlai\_x](https://forum.fixtrading.org/u/calvinlai_x)\ **Post date:** [December 13, 2005, 7:34pm UTC](https://forum.fixtrading.org/t/going-short-for-futures/12558/3 "2005-12-13T19:34:55Z")
It would be a Sell. > Hi All, > > Since I’m green in the F&O so would like to ask for a basic question. > When going short for a futures, what should be expected to send for the > tag 54 side in a new order message? Is that a Sell (2) or Shortsell (5)? > > Thanks ---
**Author:** ![fplpo\_x](https://avatars.discourse-cdn.com/v4/letter/f/7ab992/32.png) [@fplpo\_x](https://forum.fixtrading.org/u/fplpo_x)\ **Post date:** [December 14, 2005, 9:22am UTC](https://forum.fixtrading.org/t/going-short-for-futures/12558/4 "2005-12-14T09:22:30Z")
[original email was from Greg Wood - [gregjwood@hotmail.com](mailto:gregjwood@hotmail.com) ] Futures (and options) don’t really have the same concept of short selling since by definition the very first trade on a future implies that the buyer goes long and the seller goes short, so as Calvin says you would just set this to be a Sell (tag 54=2). However some derivatives exchanges (particularly in Japan) may also require you to mark your order as opening or closing a position using tag 77. A sell with tag 77=O implies that you are opening a short position. A sell with tag 77=C implies that you are closing an existing long position. Regards, - Greg > It would be a Sell. > > > Hi All, > > > > Since I’m green in the F&O so would like to ask for a basic question. > > When going short for a futures, what should be expected to send for > > the tag 54 side in a new order message? Is that a Sell (2) or > > Shortsell (5)? > > > > Thanks ---
**Author:** ![tkch\_x](https://avatars.discourse-cdn.com/v4/letter/t/5f9b8f/32.png) [@tkch\_x](https://forum.fixtrading.org/u/tkch_x)\ **Post date:** [December 15, 2005, 12:10pm UTC](https://forum.fixtrading.org/t/going-short-for-futures/12558/5 "2005-12-15T12:10:57Z")
Thanks for your valuable input. Having reviewed the 4.2 spec, seems the tag 77 is an optional field. As a buy-side firm can we not passing it? And are we getting a reject from the exchange for not passing it? K. C. > Futures (and options) don’t really have the same concept of short > selling since by definition the very first trade on a future implies > that the buyer goes long and the seller goes short, so as Calvin says > you would just set this to be a Sell (tag 54=2). > > However some derivatives exchanges (particularly in Japan) may also > require you to mark your order as opening or closing a position using > tag 77. A sell with tag 77=O implies that you are opening a short > position. A sell with tag 77=C implies that you are closing an existing > long position. > > Regards, > > - Greg > > > It would be a Sell. > > > > > Hi All, > > > > > > Since I’m green in the F&O so would like to ask for a basic > > > question. When going short for a futures, what should be expected to > > > send for the tag 54 side in a new order message? Is that a Sell (2) > > > or Shortsell (5)? > > > > > > Thanks ---
**Author:** ![fplpo\_x](https://avatars.discourse-cdn.com/v4/letter/f/7ab992/32.png) [@fplpo\_x](https://forum.fixtrading.org/u/fplpo_x)\ **Post date:** [December 15, 2005, 12:34pm UTC](https://forum.fixtrading.org/t/going-short-for-futures/12558/6 "2005-12-15T12:34:36Z")
[original email was from Jim Northey - [jnorthey@jandj.com](mailto:jnorthey@jandj.com) ] K.C. The rejection of a message for inclusion of an optional field is not what I would call the normal expected behavior. The expected behavior would be for your counterparty to ignore the optional field as you have sent them a valid FIX message. Sometimes counterparties are more strict in terms of what they will accept on the FIX message because they do not want their counterparties to assume that acceptance of a particular optional field implies that it was used in processing the message. I would say firms that follow this approach are in the minority. Regarding the OpenClose(tag 77) usage - it really depends upon the market and the type of account whether its use is acceptable. OpenClose processing provides support for omnibus accounting where positions need to be held at a gross level instead of being netted out. OpenClose processing is used primarily for equity options markets. Futures markets use Position Change Submission (PSC) to manage omnibus accounts so OpenClose codes are not used. If the exchange you are connecting to support omnibus accounting managed using OpenClose processing - it seems that they should support OpenClose (tag 77) usage (you could make an argument that it is required for this type of market). If you would like some help in resolving the issue with a particular exchange - please feel free to contact me out of band - we should be able to find someone on the Global Derivatives Committee that could help resolve the issue with you. > Thanks for your valuable input. > > Having reviewed the 4.2 spec, seems the tag 77 is an optional field. As > a buy-side firm can we not passing it? And are we getting a reject from > the exchange for not passing it? > > K. C. > > > > > Futures (and options) don’t really have the same concept of short > > > selling since by definition the very first trade on a future implies > > that the buyer goes long and the seller goes short, so as Calvin says > > you would just set this to be a Sell (tag 54=2). > > > > However some derivatives exchanges (particularly in Japan) may also > > require you to mark your order as opening or closing a position using > > tag 77. A sell with tag 77=O implies that you are opening a short > > position. A sell with tag 77=C implies that you are closing an > > existing long position. > > > > Regards, > > > > - Greg > > > > > It would be a Sell. > > > > > > > Hi All, > > > > > > > > Since I’m green in the F&O so would like to ask for a basic > > > > question. When going short for a futures, what should be expected > > > > to send for the tag 54 side in a new order message? Is that a Sell > > > > (2) or Shortsell (5)? > > > > > > > > Thanks ---
**Author:** ![fplpo\_x](https://avatars.discourse-cdn.com/v4/letter/f/7ab992/32.png) [@fplpo\_x](https://forum.fixtrading.org/u/fplpo_x)\ **Post date:** [December 16, 2005, 12:07am UTC](https://forum.fixtrading.org/t/going-short-for-futures/12558/7 "2005-12-16T00:07:45Z")
[original email was from Greg Wood - [gregjwood@hotmail.com](mailto:gregjwood@hotmail.com) ] Just on top of what Jim says below, tag 77 _is_ optional and it is very unlikely that an exchange or broker would reject an order that does not contain this tag. In the majority of cases marking the side simply as buy or sell is sufficient for trading futures. Markets such as the Tokyo Commodities Exchange actually insist on this tag being present (and correct), but the great majority of derivatives exchanges across the world do not mandate its use. Its use is really more important on markets where there are strict position limits in place and/or where omnibus accounting is used by members. These are typically Asian markets or commodities markets. If you are trading such a market through a broker then it is actually the responsibility of the broker - not the client - to ensure that this sort of information is correct in all orders going to market. - Greg > K.C. > > The rejection of a message for inclusion of an optional field is not > what I would call the normal expected behavior. The expected behavior > would be for your counterparty to ignore the optional field as you have > sent them a valid FIX message. > > Sometimes counterparties are more strict in terms of what they will > accept on the FIX message because they do not want their counterparties > to assume that acceptance of a particular optional field implies that it > was used in processing the message. I would say firms that follow this > approach are in the minority. > > Regarding the OpenClose(tag 77) usage - it really depends upon the > market and the type of account whether its use is acceptable. OpenClose > processing provides support for omnibus accounting where positions need > to be held at a gross level instead of being netted out. OpenClose > processing is used primarily for equity options markets. Futures markets > use Position Change Submission (PSC) to manage omnibus accounts so > OpenClose codes are not used. > > If the exchange you are connecting to support omnibus accounting managed > using OpenClose processing - it seems that they should support OpenClose > (tag 77) usage (you could make an argument that it is required for this > type of market). > > If you would like some help in resolving the issue with a particular > exchange - please feel free to contact me out of band - we should be > able to find someone on the Global Derivatives Committee that could help > resolve the issue with you. > > > Thanks for your valuable input. > > > > Having reviewed the 4.2 spec, seems the tag 77 is an optional field. > > As a buy-side firm can we not passing it? And are we getting a reject > > from the exchange for not passing it? > > > > K. C. > > > > > > > > > Futures (and options) don’t really have the same concept of short > > > > > selling since by definition the very first trade on a future implies > > > that the buyer goes long and the seller goes short, so as Calvin > > > says you would just set this to be a Sell (tag 54=2). > > > > > > However some derivatives exchanges (particularly in Japan) may also > > > require you to mark your order as opening or closing a position > > > using tag 77. A sell with tag 77=O implies that you are opening a > > > short position. A sell with tag 77=C implies that you are closing an > > > existing long position. > > > > > > Regards, > > > > > > - Greg > > > > > > > It would be a Sell. > > > > > > > > > Hi All, > > > > > > > > > > Since I’m green in the F&O so would like to ask for a basic > > > > > question. When going short for a futures, what should be > > > > > expected to send for the tag 54 side in a new order message? Is > > > > > that a Sell > > > > > (2) or Shortsell (5)? > > > > > > > > > > Thanks