ba - warehouse trade

The background:

Thinking about a client order to buy a huge amount of SIA shares: the order may take days or weeks to fill.

Before fill the order in full quantity, we can warehouse the executed quantity to a warehouse account.

On the day that the order is fully filled, we then un-warehouse all quantities from the warehouse account, and book them out to a client trade.

The FO/BO actions:

In the chain of actions, here is a typical sequence of who did what, at when:

Credit Reporting on Warehoused Position:

Since on day 1 when the executions are warehoused, they are not booked out to client yet; they are not officially counted as a client position. If you try to book out the partial allocation to client, they have the right to say no, they don't want it. Therefore, the exposure is the agency's exposure; the position SHOULD NOT be part of the credit calculation.