Try TT Now

X_TRADER®

Calculating Implieds From Implieds

You are viewing X_TRADER Version 7.17 and higher. For earlier versions, click here

With implieds, you may calculate implieds from implieds.

The word generation is used to describe how far away the implied price is from the direct price.

  • First generation implieds are composed of only direct prices.
  • Second generation implieds require a first generation implied price and at least one direct price.
  • Third generation implieds require a second generation implied price.
  • Fourth generation implieds require a third generation implied price.
  • And so on...

Example: In this example there is a direct Bid price in June and an Ask price in the June - September spread.

Crude Oil ContractBid QtyBid PriceAsk PriceAsk Qty
June1506000  
September756010  
June - September  -1075
December  6025200
September - December50-11  

The bid price of 6010 in September (shaded yellow) is a first generation implied out order. The price is implied out of the June - September Ask spread price of -10. When the ask spread price of -10 is subtracted from the June bid of 6000, we have a price of 6010 in the September bid.

June Bid (Leg 1)

 

Implied September Bid (Leg 2)

 

June - September Ask Price

6000

-

6010

=

-10

The direct price in December may be combined with the first generation implied bid price in September to generate a second generation bid price in the September - December Crude Oil spread (shaded green).

Implied September Bid (Leg 1)

 

December Ask (Leg 2)

 

Implied September - December Bid Price

6000

-

6025

=

-11