Pre-Trade Risk Checks Crack 1 Millionth of a Second
January 20, 2012
Lime Brokerage said it reduced the time it takes to execute pre-trade risk checks to less than a millionth of a second.
Th provider of low-latency technologies and high-volume agency brokerage services said it was achieving a benchmark average of fewer than 250 billionths of a second in executing pre-trade risk controls, in a new service called LimeDirect.
LimeDirect offers “near frictionless trading by allowing the client to control the market drivers and network,’’ the brokerage unit of Wedbush said.
In October, Ullink said it lowered the time it takes for its pre-trade risk check system to work to two millionths of a second.
The global provider of low latency connections and trading services said it achieved the two-microsecond speed with its UL IRIS+ risk management appliance, which uses floating point gate array technology. The speed was achieve working with the OUCH communications protocol, widely used in options markets.
In July, Bank of America Merrill Lynch introduced a trading platform that executes orders wire-to-wire in fewer than 10 millionths of a second. The system, called BofAML Express, includes pre-trade risk checks.
The focus on speed of pre-trade risk controls has heightened since the Securities and Exchange Commission’s ban on unfiltered or “naked” access to markets, electronically, took effect in July.
The 15c3-5 market access rule is designed to protect brokers who allow customers to send orders directly to trading venues using their market participation clearance IDs.
“We developed LimeDirect to end the discussion on latency and to provide a robust risk management solution where clients didn’t have to trade speed for compliance,” said Jeff Bell, CEO of Lime.
LimeDirect enables customers to use their existing market drivers, manage market connectivity, and add new order types at will, upon approval of the sponsoring broker.
Founded in 2001 and privately-held, Lime Brokerage operates as a wholly-owned subsidiary of Wedbush, Inc. headquartered in Los Angeles, CA.
The firm’s largest holding, Wedbush Securities, is one of the nation’s largest securities firms and a top ranked Liquidity Provider for the Nasdaq Stock Market.
