Alternative derivative exchange
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Lot Based Pre-Submission Risk

"Control your risk with greater granularity"

The ADE platform utilizes a pre-trade submission lot-based risk allowance system to ensure fair and controlled trading for all clients. The lot-based limits act as a hard limit on clip sizes and the number of open positions for each contract, and are applied at all hierarchy levels such as Account, User, Firm and Clearing Member level. This ensures that all trades remain within acceptable risk levels and helps to prevent the potential for large losses.

ADE to Clearing Member

The exchange has an automatic level that will be set depending on the current deposit made by the FCM (i.e. risk allocation based on deposited equity). The notional value of the deposited margin will be the deciding factor and a simple mathematical formula will be applied to decide the lot position that a Clearing Member can originate. For any changes in these initially set values (owning to changes in notional values of underlying or due to cross margin efficiencies) Clearing Members will be duly informed.

Clearing Member to Client

The FCM Admin, appointed by the Clearing Member, can set volume limits on various levels such as Company, User, and Account. The most restrictive setting will be applied in all cases. Additionally, the Clearing Member can delegate risk management responsibilities to the end client entity Risk Manager, who can set limits on Account and User levels for more granular risk management. However, absolute risk restrictions for all client entities remain with the associated Clearing Member.

Client to Head of Desk/Client

The Company Admin, appointed by the Company and onboarded by the FCM, can set volume limits for Users.