ROX Systems relies on sophisticated automated controls to insure that trades are within acceptable trading limits and remain compliant with all securities regulations. All orders are routed through our systems, and undergo all required checks before being forwarded to the market.

Our controls can be viewed as falling into three district categories: Fat Finger Checks, Credit Limits Checks & Compliance Controls.

Fat Finger Checks: Fat finger checks are designed to detect an order that appears to have been entered erroneously.  Depending on the circumstances, fat finger checks will warn the trader of a possible error, or reject the order. 

  • Max Order Quantity
  • Max Order Money
  • Order Count -> Same Symbol, Side, Price, Exchange per second
  • Total Money -> Same Symbol, Side, Price, Exchange per second
  • Max Market Order Money
  • Aggressive Price Check: Reject orders between 9:30 AM and before 4:00 PM if the limit order price delta in reference to the last price exceeds 3 vol. (15% if 3 vol. is not available). We always permit a 5% variance or $1.00 whichever is more aggressive.

Credit Limit Checks: Credit controls are designed not to allow an account to take on excessive risk.

  • Concentration Exposure (-10 VOL and 10 VOL)
  • Net Market Exposure (-3 VOL to 3 VOL) 0.3 VOL increments -> 21 buckets
  • Loss Limit
  • Gross Money Excluding Open Orders
  • Gross Money Including Open Orders
  • Sell Long Check (ensure account has the required position, if configured for account)
  • Gross Money by any Symbol Excluding Open Orders
  • Gross Money by any Symbol Including Open Orders
  • Intraday Sell Quantity By Symbol Limit
  • Gross Money by Symbol (specific symbols) Including Open Orders
  • Gross Money by ant Euro Symbol Including Open Orders
  • Invalid Order Data – Quantity less than or equal to 0 or No Symbol
  • Customer Not Profiled
  • Account Stopped
  • Gross Max Money Limits Not Set
  • Liquidate Only Mode Active and Order is Establishing

Compliance Controls: Compliance controls are designed to prevent an order that would violate securities’ laws or regulations.

  • Layering Detection
  • Potential Wash Sale Detection
  • Require position for “long” sale
  • Check short sales against easy to borrow list
  • Correct Rule 80a account type
  • Booth validity check
  • Correct Open/Close for option orders
  • Enforce restricted list
  • Prevent market orders in IPO stocks
  • Throttle odd-lots
  • Restrict number of order on one side of the market in a symbol

 

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