Limit Execution Details

While these risk management tools are designed for and generally used for protection with regards to posted liquidity, the same risk configurations can impact the activity of removal flow. All risk limits are checked in an atomic way inside each matching engine. As soon as a limit is breached, all resting orders and quotes in all series relating to that Risk Root+EFID will be cancelled immediately.

Risk Controls do not affect an in-process series opening. If a risk trip occurs in the middle of matching contracts within the context of a single series opening, additional contracts may be matched for the tripped TPH before the series is opened. Within the context of a given product, if a risk limit is tripped in the opening of one series, orders in the same underlying are cancelled prior to moving to the next series. This is true for appointed Market Maker quotes, but does not hold true for orders and non-appointed Market Maker quotes.

The table that follows describes some of the different scenarios that may be encountered and should help customers to understand what to expect in the context of risk violations.