RiskMaster

Managing counter-party execution risk in real time has become a complex science for sell-side firms in an increasingly electronic trading environment, populated by hedge funds running high-velocity automated trading strategies that tend to mix and rotate asset classes. Add the global expansion of trading and major market structure changes, and it’s clear a multitude of risk systems are required to process these growing levels of information.  

Sell-side firms are not alone in experiencing this systemic problem with trading risk; buy-side firms executing their own strategies face the same issues. The buy side must manage risk for its own trading activity—occurring daily across a multitude of assets, venues, brokers, and primes—in real time for potential breach of trading limits and position exposure to the markets.  

The recent financial demise of leading investment banking and trading institutions has placed emphasis on managing risk at an all time premium. Yet, in a fast-paced, high-volume environment, where firms are engaged in an arms race to develop innovative algorithmic trading strategies and automated tools, time to develop execution-time risk management tools is limited. Firms that maximize their ability to manage risk while maintaining profitably will dominate the competitive landscape, while others risk significant loss. It is against this backdrop that Mantara’s comprehensive expressWay™ RiskMaster™ solution provides traders with immediate, cost-effective risk management support.

RiskMaster Overview

Recognizing risk management as integral to modern trading solutions, expressWay was designed from inception, to provide real-time, pre-trade risk management for tighter oversight and controls, and full transparency of trading activity. Designed to handle the demanding processing requirements of today’s trade message volumes, RiskMaster assures timely and accurate information for risk checks and monitoring. Built on expressWay’s advanced fully-redundant, fault-tolerant technology infrastructure ensures high availability, regardless of market volume and demand.  

With RiskMaster, users can set and monitor configurable trading and risk exposure limits for individuals, groups, or on a per firm basis in real time, using pre-selected, user-defined attributes. RiskMaster has unparalleled multi-broker capabilities; all information is aggregated for sponsoring firms using multiple MPIDs and for hedge funds working with multiple primes. All data is available in real time and broken down with granularity from user levels to firm totals.

 

Application Features

  • Permit or block firms and users from trading
  • Set daily shares and/or gross value limits for firms and users
  • Monitor trading limits across firms, users, and accounts
  • Monitor positions and P&L across firms, users, symbols, and accounts
  • Monitor margin information for accounts including daily trading buying power
  • View real-time alerts for order rejects and threshold warnings
  • Set fat finger checks for order size, dollar values, and price percentage away 

RiskMaster Benefits

  • Fast – risk checks add no latency to order processing, ensures industry-leading microsecond speeds
  • Accurate Pricing – pre-trade risk management utilizes real-time pricing information from expressWay’s high-speed market data ticker plant, ensures fast and accurate pricing for order validation and pricing of positions and gross limits
  • Flexibility in Deployment – manages protection on automated orders to full control of sponsored access relationships plus enables clients to manage their own trading risk

 

Sell-Side Benefits

RiskMaster provides sell-side firms with centralized, integrated risk control with real-time monitoring to enable full oversight of client trading activity throughout the trading day. Using real-time controls, traders can immediately respond to market variables and change client trading thresholds—intraday—to prevent potential limit breaches or suspend trading activities.

The ability to set limits in real time provides a powerful tool for sponsor access brokers accountable for counterparty settlement and regulatory obligations to oversee and ensure proper trading behavior.

Buy-Side Benefits

RiskMaster offers buy-side firms the ability to view risk for their high-speed trading activities in real time, which is extremely effective during volatile markets, and advanced monitoring tools help prevent exposure issues that can arise from such trading conditions.

Hedge funds trading across multiple prime brokers can view consolidated or individual information on their exposure, real-time positions, P&L, and risk limits across multiple accounts, enabling them to more efficiently manage risk and optimize trading results.