Pre Trade Risk Management
Lightspeed Gateway has been designed and implemented to meet the outlined regulatory criteria contained within Rule 15c3-5, which include all pre-trade risk validation requirements. All account rules have been uniquely coded to minimize latency. These rules monitor risk associated with buying power, buying power factor, maximum order size, maximum position size, P&L loss thresholds, short checking, odd lot allowances / restrictions and settings to reject all incoming orders. Lightspeed Gateway prides itself on being brutally efficient. All risk and compliance checks are made prior to sending data to market without incurring any measurable latency. It is Lightspeed Gateway’s efficiency that allows these services to be provided with no significant impact on performance. Lightspeed Gateway demonstrates that pre-trade risk controls can be implemented without compromising the strategies of even the most latency-sensitive traders, while still complying with the requirements of Rule 15c3-5.
Lightspeed Gateway supports ETB lists. Short sells for names not on the ETB list are automatically rejected back to the customer from the Short Avail server. The state of each security is distributed and updated in real-time as updates occur.
Lightspeed Gateway has the ability to configure client connections to reject order types.
Max Order Shares is one of many risk settings that can be changed on an account-by-account basis. Orders exceeding the limit are automatically rejected back to the customer.
If the maximum loss amount is reached – disable account.
If Maximum position size reached – only able send reducing/closing orders.
Max dollar value restriction per order.
Max dollar amount restriction per stock symbol.
The total dollar amount of any open orders will be subtracted from that account’s buying power.
If specified, is used to calculate Buying Power by multiplying the cash.
To ensure compliance with share size
To ensure compliance with short sells.
To ensure compliance with Reg NMS.
Prevent trading in requested symbols.
Overnight positions marked to closing price for accurate P&L.
To ensure compliance with long and short sells.
Can perform the following functions:
- Total P&L
- Total Shares Traded
- Realized P&L
- Unrealized P&L
- Share Volume Count
- Equity Ratio
- Open Shares
- Start of Day Liquid Equity
- Committed Capital Used
- Gross Market Value
- Risk Breach Alerts
- Position Size Share limit
- Position Size Dollar limit
- Position Concentration Limit as % of Equity