Deutsche Börse has released the latest update to its trading system, with a focus on enhanced risk management capabilities.
Xetra Release 15.0 has been introduced today and will improve the security of electronic trading and provide more robust risk management tools.
Features including “trading risk limits” that enable Xetra participants to specify their own risk strategy for trading positions. Thresholds can be entered that will limit the extent to which trading can continue for securities that see significant price movements.
Risk limits have been highlighted as a possible alternative to the use of kill switches. While the latter would shut off entire markets if a security moved rapidly up or down in price during a single day, but some have suggested this is an extreme response, and providing firms with more tools to limit their exposure to these kind of market events would be a more suitable solution.
The system also introduces liquidity interruptions and mini-auctions as security mechanisms when trading with designated sponsors. Deutsche Börse said these functions will improve trading quality through designated sponsor participation in the order book.
Xetra Release 15.0 also includes an opt-out for Xetra Midpoint. Orders have an individual setting stating whether they should be sent to the Midpoint block agent in anonymised form.
Other upgrades include improvements to the Xetra FIX interface and flagging for algorithmic trading.