ISE, ISE Gemini Enhance Risk Management Through Market-Wide Speed Bump
On Thursday, the International Securities Exchange Holdings, Inc. announced that its exchanges ISE and ISE GeminiTM have enhanced their market makers risk management capabilities through the implementation of a Market-Wide Speed Bump. This improves risk management by limiting a market maker's total exposure across a market.
As part of the exchanges' existing portfolio of risk management offerings, market makers are required to set risk thresholds for each options class they are quoting. The Market-Wide Speed Bump is activated automatically if these thresholds are breached for multiple products within a specified time period, and all quotes for that market maker are then inactivated.
On February 18, 2014, the Market Wide Speed Bump was implemented; it is mandatory for all market makers.
Boris Ilyevsky, Managing Director, said in a press release, "The implementation of the Market Wide Speed Bump provides our members with an across-the-market safeguard over their quoting activity. This enhancement demonstrates our ongoing commitment to providing our market makers with sophisticated risk management tools and to protecting market integrity and resilience for all exchange members."
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