Why are the Cboe orders sitting above the ASX orders?

Sometimes you will notice that orders that were placed after yours, will enter the full depth (Cboe data & ASX data) above you, at the same price. Often, they will transact before you, even though they were placed after your order. 

This is all due to the existence of two exchanges that operate concurrently - ASX and Cboe - and the function of the order router that places orders in the market. There are two separate exchanges in Australia for trading of publicly listed securities, and each has a different set of functions. For example, the ASX allows orders to remain on the market for a period of days, whereas the Cboe exchange purges all orders each night.  

For orders placed at Market, the order router looks for the ‘best execution price’.   The order router at Openmarkets - which is the same as that which the majority of Australian Market Participants use - is programmed to take 4 distinct steps each time you place a Market order, in order to ensure you are getting the best price:

1. check the Cboe Mid-Point market (for any volume at a price better than the market price shown in the depth) - see our article on Order Destinations to learn more about hidden liquity/dark market destinations
2. check the ASX Centre Point market
3. check the Cboe normal/lit market
4. check the ASX normal/lit market

You can see these steps in many of your transactions, by checking the Order History. 

As the order router attempts to transact on the Cboe exchange first, orders on the Cboe exchange will be matched with any orders going through the order router before an ASX order at the same price. 

This is why we visually represent the Cboe orders above the ASX orders at the same price, as the order router will transact new Market orders against Cboe orders before ASX orders, regardless of the time that the ASX orders were placed on the market.

For Limit orders (ie orders placed at a specific price), or orders that do not immediately transact, by default the order router will place orders to rest on the ASX exchange (ie the last market checked).  Per below, FocusPro subscribers can elect to place orders at a particular destination, on either exchange.  

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