Pre-Trade Risk Management

Risk limits allow a risk admin to determine how much risk users are allowed to take during a trading session or business day. Users can also set alerts to notify any admin or market participant that a set percentage of a limit has been reached. 

We offer pre-trade risk management through the following limits, set by admins on the business level: 

• Monetary Limits – Based on expected market price volatility, can be set in margin or notional quantity amounts
• Delta (for Options) and DV01 (for Fixed Income) - Normalize risk utilizations between instruments
• Position Limits – long and short position limits can be Venues products that are traded in per contract (Lot) terms.

There are a variety of tools and functions available for clearing and trading participants to manage risk at the order level with differing availability across CME Group listed derivatives, EBS Market and BrokerTec markets. Order management allows admins to oversee and manage orders as well as providing functions to end or limit orders as needed. 

Order management allows users to: 

• Block new orders at different executing or clearing firm levels 
• Cancel open orders at different management levels
• Cancels all resting orders upon an ungraceful disconnect (Cancel on Disconnect)
• Auto-eliminates all working orders when a session Terminates and disconnects gracefully (Cancel on Conclusion)
• Prevent the matching of orders with common ownership
• Access real-time information on working and filled orders
• Monitor real-time trading activity 

Admins can adjust permissions to determine which products and trade types market participants in  their group are allowed to access. Product permissions use allow/deny methodologies while trade type permissions can be set to align with regulation or by specific client. 

Real-time dashboards and end-of-day reports provide a risk management view of credit use versus limits. 

Risk management functions are supported by an audit trail, documenting all changes in settings and their real-time effects.