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Session Based Trading
Session Based Trading, often referred to as ‘Matching’, is a process designed to match buyers and sellers of financial instruments via an electronic platform. This trading protocol is typical of over-the-counter markets (OTC). In these often less liquid OTC markets, Session Based Trading provides an extension to the standard central limit order book (CLOB) method, to create a concentration of interest.

History
Creditex and GFI Group pioneered electronic session based trading in credit default swaps in 1999. GFI Group expanded this type of trading into other markets including bonds, FX options, interest rate options and freight derivatives.

Characteristics
The main characteristics of a trading session and fundamental ways in which it makes up for deficiencies in CLOB trading are:
 * Sessions are offered for only a sub-set of the entire universe of available instruments
 * Sessions run for a limited period of time (e.g. 5 minutes)
 * Sessions run on pre-defined time schedules (e.g. every Monday at 10am or twice every day at 11am and 3pm)
 * Trading takes place at a pre-defined price level, which is an indicative invitation to trade
 * Since the price is already determined, participating traders will only submit a mutually exclusive order to buy or sell, defining the size they are interested in

Execution
While in the standard CLOB method there is a low bid and a high offer to start with and a subsequent negotiation to improve one or both sides until the price is matched, in Session Based Trading the process is inverted. In Session Based Trading the suggested trading price is the starting point rather than the end goal, and traders are invited to express an opinion via their orders at that price, with no negotiation involved

Hybrid Brokering
The integration of voice brokers with electronic brokerage systems is referred to as hybrid broking. Hybrid broking may range from coupling traditional voice brokerage services with various electronic enhancements, such as electronic communications, price discovery tools and automated order entry, to full electronic execution supported by telephonic communication between a broker and his or her customers.

Wholesale Brokerage
Wholesale brokers provide highly sophisticated trade execution services, combining a team of traditional “voice” brokers with sophisticated electronic trading systems that match institutional buyers with sellers in transactions for financial products that are listed on traditional exchanges or transacted over the counter.

Capabilities
Hybrid broking capabilities are often complemented with decision support services, value-added data and analytics products, real-time auctions, fixing and matching sessions and post-transaction services, such as straight-through processing (STP), clearing links and trade and portfolio management services.

Utilization
Asset classes which support hybrid style execution include: commodities, credit, equities, fixed income and financials. Top brokers that use hybrid broking as one of their execution strategies include: Icap, Tullett Prebon, Tradition, GFI Group and BGC.