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Implied quantity follows these basic rules in all markets:
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The examples below show how implied orders are constructed in one market based on orders in another.
Implied Overview
This brief video introduces the way implied functionality provides liquidity across markets.
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Implied IN spread orders derive from existing outright orders in individual legs. Below is an example for an implied ask in a spread created from outright orders (known as an implied IN order).
(i = implied order)
In this scenario, the Ask for 10 in September at 9500 and the Bid for 5 at 9450 in December create an implied Ask at 50 for 5 in the Sept-Dec spread order book.
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Example: Implied OUT Orders
Implied OUT outright orders are derived from a combination of an existing spread order and an existing outright order in one of the individual underlying legs. These two orders are used to create a contingent outright order on the other underlying leg of the spread. The following is an example for an implied bid in an outright order book (known as an implied OUT).
(i = implied order)
In this scenario, the Ask order in Sept-Dec spread for 5 at 50 (i.e., simultaneously sell 5 September contracts and buy 5 December contracts) and the Offer order in December for 5 at 9450 create an implied Ask order in the September order book for 5 at 9500.
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Stop-Limit Orders for Implied-Eligible Instruments
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The following topics contain more information on this topic:
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