MGF orders in financial markets require traders to execute minor purchases made by individual investors at the best current bid or ask price if the investments are equal to or below the minimum amount set out. MGF orders may assist individual investors who place market or limit orders.

How an MGF Order Works

A minimum guaranteed fill order is used to ensure that an investor who buys seven shares receives the same price as an investor who buys 100 shares. With this system, it's possible to buy and sell stocks at any given time, ensuring a constant flow of trading. Traders and market makers are essential in promoting liquidity and ensuring a fair market for a specific stock list.

MGF orders are often tiny market orders since they are targeted at individual investors. To draw in more orders for the same stock, the market maker, the trader's employer provides this service. As a result, an MGF is advantageous to retail investors since it expedites the transaction. Market makers that can provide this service on a wide scale and catch both buy and sell orders gain from this service.

Examples of MGF Orders

Certain stocks have well-defined maximum growth rates (MGF). There will always be at least 500 shares of a particular stock mentioned in both the bid and the offer if it has an MGF of that size. The investor can still place a sell order for 400 shares even if only 200 shares are being offered at the desired price. The order will be fully completed.

The buyer who placed the offer will fill the first 200 positions, with the market maker filling the remaining positions automatically. Only the 200 shares bid will be supplied if an investor tries to sell 700 shares, which exceeds the MGF. The following are some additional examples: An MGF volume of 1,200 shares of a stock selling at $4–$4, 10, where 600 shares are being offered to the highest bidder for $4 and 400 are being made available to the lowest.

MGF Facility (Minimum Guaranteed Fill)

Suppose there is insufficient liquidity to fill an investor's order in the Continuous Limit Order Book (CLOB). In that case, the Minimum Guaranteed Fill (MGF) facility provides guaranteed fills at the TSX Best Bid and Offer ("TBBO"), subject to a maximum size and qualifying requirements. For natural investors, it provides an extra source of liquidity at the best possible price. All TSX-listed securities with designated Market Makers, except debentures and notes, are backed by the MGF facility.

What Does MGF Mean in the Banking Industry?

In banking jargon, MGF means "minimum guaranteed fill order," however, additional possible meanings are listed at the bottom of the page. All the purposes associated with the acronym "MGF" can be found solely in the context of banking terminology. Please read the MGF definition page for further interpretations.

You will be sent to the MGF definition page if you click on the link. It is recommended that you re-enter search terms such as "what does MGF mean in banking, the meaning of MGF in banking" if you find more than one definition for the acronym MGF at the bottom. In addition, you may type MGF into the search box on our website and see what results come up.

Benefits of Using the MGF Facility

• Orders eligible for minimum guaranteed fill (MGF) have a guaranteed minimum fill rate.
• TSX Market Makers provide additional top-of-book liquidity.
• Confidence in the ability to carry out
• Real-time, symbol by symbol MGF sizes are provided on TSX feeds, allowing routing methods to be implemented.

MGF Trader ID Prequalification

Trading participants who wish to use the MGF Facility's extra top-of-book liquidity must first qualify their trader I.D.s, which will be sending MGF orders, as MGF-Eligible Trader I.D.s before they can use it. Non-MGF-Eligible Trader I.D.s cannot get MGF fills on any order, regardless of the order parameters.

This safeguards the market maker by ensuring that the intended audience uses the facility. Maintaining high levels of trust in the MGF facility, which in turn allows market makers to provide the largest possible MGF sizes, requires the ability to prohibit Trader I.D.s that are not eligible from interacting with the MGF facility.

Eligibility Requirements For MGF

If a revealed client order is less than or equal to the MGF-Eligible Order Size, the charge is eligible for MGF funding.

• Suppose the parent purchase (sell) order is equal to or less than the MGF-Eligible Order Size. In that case, the client order is part of the more significant order and is transmitted to the Exchange to be executed simultaneously with the rest of the parent order.
• DMA clients have access to the market directly (unless the DMA client is a broker acting as an "agent" for retail client order flow).
• Produced as a result of computer code.