Indication of Interest

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1

Imported from previous forum

2

Hi,

I am new working with FIX, and I would like to know:

What the indication of interest used for and
how to use this message type.
Is it the client who send this message or the broker to his client.

Thanks in advance.

3

[ original email was from Himanshu Sharma - himanshu.sharma@schwab.com ]
As I understand, IOI are sent from dealer(sell-side) to customers(buy-side).
An example:
A dealer has two customers CustA and CustB. CustA sends an Order to sell 10000 shares of MSFT. Then dealer sends an IOI (with an IOIID) to CustB indicating ‘buy MSFT’. If CustB is interested, (s)he can send a buy order for MSFT refering IOIID of dealer.

From the web:
investorwords.com:
indication of interest
Orders for a new securities offering which are placed prior to final registration and represent only a tentative interest rather than a firm commitment to buy.

investopedia.com:
Indication of Interest - IOI
An underwriting expression showing a conditional, non-binding interest in buying a security that is currently in registration (awaiting effectiveness by the SEC). The investor’s broker is required to provide the investor with a preliminary prospectus.
The IOI is non-binding because it is illegal to sell a security while still in the registration process

HTH

> Hi,
>
> I am new working with FIX, and I would like to know:
>
> What the indication of interest used for and
> how to use this message type.
> Is it the client who send this message or the broker to his client.
>
> Thanks in advance.
>
>

4

[ original email was from Brian Gay - brian.gay@transacttools.net ]
Yes, IOI’s are single line messages sent from the sellside to the buyside expressing their willingness to buy or sell a particular block of stock. They are a ‘pre-trade’ message. Trade Advertisements are another message similar to IOI’s, but they are sent after the trade has been completed, and serve as a way for the sellside to market their liquidity in particular stocks.

IOI’s can be sent with or without an actual numeric size and price. IOI’s sent with a true size & price are generally considered of a higher quality than those sent without. They tend to represent liquidity on the other side of the trade, not a principal position or order solicitation. These types of IOI’s can also be labeled ‘natural’, and are often used to improve the buysides’ confidence that their trade will be completed with minimal market impact and that they are not the victim of ‘fishing’.

> As I understand, IOI are sent from dealer(sell-side) to customers(buy-side).
> An example:
> A dealer has two customers CustA and CustB. CustA sends an Order to sell 10000 shares of MSFT. Then dealer sends an IOI (with an IOIID) to CustB indicating ‘buy MSFT’. If CustB is interested, (s)he can send a buy order for MSFT refering IOIID of dealer.
>
> From the web:
> investorwords.com:
> indication of interest
> Orders for a new securities offering which are placed prior to final registration and represent only a tentative interest rather than a firm commitment to buy.
>
>
> investopedia.com:
> Indication of Interest - IOI
> An underwriting expression showing a conditional, non-binding interest in buying a security that is currently in registration (awaiting effectiveness by the SEC). The investor’s broker is required to provide the investor with a preliminary prospectus.
> The IOI is non-binding because it is illegal to sell a security while still in the registration process
>
> HTH
>
>
> > Hi,
> >
> > I am new working with FIX, and I would like to know:
> >
> > What the indication of interest used for and
> > how to use this message type.
> > Is it the client who send this message or the broker to his client.
> >
> > Thanks in advance.
> >
> >
>