Mantara adds algo kill switch to broker platform
trading technology vendor Mantara has added an algo kill switch to its
broker-dealer offering as oversight and monitoring of electronic trading tools
is thrust back into the spotlight.
now offers brokers ExpressWay E-Brake, a hardware-based solution that allows
firms to stop strategies immediately and minimising losses resulting from
sends kill messages directly into Arista or Cisco switches, allowing brokers to
kill strategies manually or through automated means.
manual kill switch can be triggered through a desktop application, terminating
single, multiple or all strategies. The automated version allows users to set
kill parameters for single, multiple or all strategies based on risk parameters
including principal value, order frequency, order size, average daily volume,
position size, P&L and duplicate order checks. Orders and positions can also
be tracked and alert messages can be sent to halt trades at the order level,
modify strategy behaviour or notify compliance officers that dangerous trading
said its new tool was launched following the technology glitch that cost US
market maker Knight Capital US$440 million, an example of failures it says are rapidly becoming
commonplace. The Knight error led to multiple erroneous orders being sent to
NYSE Euronext at the start of trading on 1 August and forced the firm to
rogue algorithmic order was also blamed by regulators for causing the flash
crash on 6 May 2010. During the crash, US$1 trillion was wiped from the value
of the US stock market in the space of 20 minutes, before recovering just as
quickly. Following the flash crash, US regulator the Securities and Exchange
Commission passed a rule requiring brokers to install pre-trade risk checks
before allowing clients to access markets directly.
this year, IPOs of trading venue operator BATS Global Markets and Facebook were
also disrupted after exchange technology errors. BATS was forced to cancel its
IPO – the first stock to be issued on its own listings service – while Nasdaq
OMX plans to pay US$62 million worth of compensation to members that were
unable to determine their positions following the debut of Facebook’s stock.