Imported from previous forum
If DEF is hedged by ABC then ABC is the related instrument, not the complex instrument of which ABC is a part of. ABC could be a part of more than one complex instrument and also be traded standalone. If the complex instrument XYZ needs to be traded for ABC to function as a hedge for DEF then I would say XYZ is the related instrument. The use cases sound theoretical or do you have actual business requirements?
Got it thanks. Also if there is a complex instrument XYZ which has two legs ABC (hedge for DEF) and GHI (hedge for JKL) then will the RelatedInstrumentGrp for DEF contain both ABC & XYZ?
Hi Aditya,
the concept was introduced with EP103 (http://www.fixtradingcommunity.org/pg/file/fplpo/read/33974/ep103-occ-large-options-position-reporting). Your text from above seems to be from the GA. The instrument being hedged will appear in the existing Instrument block, i.e. if DEF is hedged by ABC then ABC hedges DEF and ABC will thus be in the RelatedInstrument block and DEF will be in the existing Instrument block.
ABC is just another instrument and you can use the security definition message to provide its full definition. The RelatedInstrument block is only to be used to make a reference, not to define an instrument.
Regards,
Hanno.
I just had a quick question about the RelatedInstrumentGrp Component Block which has this description:
The new RelatedInstrument Block is being proposed to report and differentiate the instrument used as a Hedge versus the instrument being hedged. The latter instrument will appear in the existing Instrument block.
Does this mean that if instrument ABC is being used to hedge instrument DEF then the Instrument Block will contain DEF and RelatedInstrument Block will contain ABC?
Also if the RelatedInstrument Block contains ABC then will ABC itself also be described in the Instrument Block in it’s own security definition message?