Risk Control

This document explains the items and parameters in the Risk Control Window.

Please note that all parameters entered in this window are only in effect on the selected account. This window is more like a local risk control window. If you are the admin user and want to set up the risk controls for the specific branches or the whole firm, it will have to be configured in Risk Management Window under the Admin option on the menu bar.

Explanation of Fields & Buttons #

Section 1

  • MaxLoss: Shows account max loss limitation for NET PL (realized PL & commissions). When max loss is reached, all new orders will be rejected (i.e. no more trades today). This can be used with “Enable Auto Stop” for the system to automatically liquidate position. Note: This does not include other fees, such as ECN/SEC fee, etc.
  • Warning Loss: Field shows warning about account’s realized + unrealized PL. When entered amount is reached, system will warn the trader.
  • Total Loss: Similar to MaxLoss, but the total loss is of the account’s realized + unrealized PL. When Total Loss is reached, all new orders will be rejected (i.e. no more trades today). This can be used with “Enable Auto Stop” for the system to automatically liquidate position.
  • Curr EQ Lmt: Field shows the account’s equity. If the account’s current equity (Open Equity+TradesEQ+PositionsEQ.) goes below this limitation, the system will reject new orders (i.e. no more trades today). This can be used with “Enable Auto Stop” for the system to automatically liquidate position.
  • Position Total Loss: Field shows the Individual position. If the position’s realized + unrealized PL goes below this limitation, the system will reject this symbol/position’s new order (i.e. no more trades today). This can be used with “Enable Auto Stop” for the system to automatically liquidate position.
  • Position Unreal Loss: Field shows the Individual position. If the position’s unrealized loss goes below this limitation, system will reject this symbol/position’s new order (i.e. no more trades today). This can be used with “Enable Auto Stop” for the system to automatically liquidate position.
  • Pos Mkt Val Loss (%): Field shows the Individual position and is for the position’s realized+unrealized PL. The limitation value is the percentage of the initial market value percentage. For example, if the trader bought 100 shares of stock XYZ at $10, and set the field to 20%; the limitation value will become 200(100*10*20%). When reached, the new order for this symbol/position will be rejected (no more trades for this symbol). This can be used with “Enable Auto Stop” for the system to automatically liquidate position. Note: The calculation formula for the Pos Mkt Val Loss = Share Size * Average Cost * Percentage.
  • Pos Mkt Px deviate (%): Field shows the Individual position and is set for the reduction in market price from a single position’s average cost in percentage terms. For example, the trader bought 100 shares of stock XYZ at $10. If the Pos Mkt Px deviate field is set at 10%, the limitation value will become $1. When the XYZ market price moves down below $9, this limitation will be reached and the new order for this symbol/position will be rejected (i.e. no more trades for this symbol). This can be used with “Enable Auto Stop” for the system to automatically liquidate position.

Note: The calculation formula for the Pos Mkt Px Deviate Value = Average Cost * Percentage.

  • Pos Loss Warning: When the single position loss reaches this value, system will warn the trader. There are 3 types of Pos Loss Warnings. Note: For Pos Loss Warning (%), if 10 (10%) is entered, then the warning value will be equivalent to the “Average Cost * 0.10”.

Section 2

  • Count in Commission for Total Loss/Warning Loss/Curr EQ Lmt: Commissions will be included when the total loss/warning loss/current equity limit are calculated.
  • Enable Auto Stop: Field controls the liquidation of the account’s open positions when above Loss limitation is reached. If checked, the system will liquidate the position(s) when those limitations have been reached. If unchecked, it will block the new order when reached. Note: Auto Stop only works during regular market hours (9:30AM EST – 4:00PM EST), it is disabled during pre and post market hours.
  • Downcount: This is an option for when Auto Stop and Stop Gain are triggered; this control decides how many seconds pass before the system liquidates positions. For example, if the Downcount is set to 30, the system will start to liquidate your position(s) 30 seconds after Stop Loss is activated.
  • Max Share: This is an option for when Auto Stop and Stop Gain are triggered; this control shows the maximum number of shares that can automatically be liquidated. When the limitation is reached, system will stop liquidating positions and reject new orders once the loss limitation is reached. Note: “0” means no limitation.
  • Max Auto Stop Order Size: This is an option for when Auto Stop and Stop Gain are triggered; this control decides the maximum share size per single order. For example, if the system needs to liquidate all 1,000 shares of stock XYZ, and this value is set to 200, the system will send five (5) orders; each order with share size of The order sending interval time is defined by the “Delay for next order if exceeding max order size (sec)” control.
  • Stop Gain: When checked, Stop Gain will lock down profit. Trader must, first, set up the profit thresh and the drop down percentage. Once the account’s profit reaches thresh and drop down from peak profit by a specific percentage, the system will liquidate positions. For example, trader has set the Account Net Realized PL Thresh value to $800 and the Drawdown Percent of Max Net PL is set to 20%. The system will look to automatically liquidate the account’s positions when the account’s current realized PL exceeds $800 and reaches say, $2000, then proceeds to drop down 20%, or $400 ($2000 x 20%) for a Net PL of $1600 or less. Note: This does not include other fees such as ECN/SEN fees, etc. Note: “0” will work for Drawdown although it is recommended to use 1%-99%, because zero will liquidate immediately.

Equation: If PositionMaxUnrealizedPL > ThreshMarketValue AND PositionCurrentUnrealPL < DrawdownMktVal: auto stop will be triggered.

  • DrawdownMktVal = PositionMaxUnrealizedPL * (1-drawdown) = PositionMaxUnrealizedPL*0.9 (assume Drawdown is 10%)
  • Account Total PL Thresh and Drawdown Percent of Total PL: This field can be used once Stop Gain is enabled and is similar to Account Net Realized PL Thresh, but shows the TOTAL PL (Realized+Unrealized). This field will include commission if “Count in Commission” is checked.
  • Pos Stop Gain Thresh and Drawdown (and %): After position profit reaches thresh, when drop down from peak profit by a specific value (or percentage), system will liquidate positions. Note: These two options work for the unrealized PL only, and the Initial Market Value is referring to position’s average price.

Equation: if PositionMaxUnrealizedPL > ThreshMarketValue AND if PositionCurrentUnrealPL < DrawdownMktVal: auto stop triggered.

  • DrawdownMktVal = PositionMaxUnrealizedPL * (1-drawdown) = PositionMaxUnrealizedPL * 0.9 (assume Drawdown is 10%)

Section 3

  • Enable Unwind: Check this box to tell the system to automatically unwind your positions one (1) minute before market close (3:59PM EST). Two options are given; one is to only unwind the short positions, while the second gives the option to unwind ALL positions.
  • Discretionary: This will mark your account as a discretionary account. (i.e. It is no longer in use.)
  • No Branch Cross Order: When checked, this will disable the branch cross feature/orders.
  • Always allow unwind positions (ignore some risk limits): This will ignore some risk limitations by always allowing the trader the option to unwind the positions.
  • Share Buying Power with Account: Shares the buying power with the selected account.
  • Broker Type: Field will set an account to a specific broker type. Some routes could be set to only allow orders from specific broker type accounts. Note: This depends on the broker; some firms have this feature enabled.
  • MaxShare: Set up the maximum shares this account can trade per day. If reached, system will reject new orders (i.e. no more trades today). For example, MaxShare is set to 1000. If 100 MSFT are bought and then fully covered later, this will count as 200 (100 Buy and 100 Sell) out of 1000.
  • Share/Symb: Maximum shares per position, if reached, system will reject new orders.
  • TotalShare: Maximum shares for all positions, if reached, system will reject new orders.
  • TotalSymbols: Total number of symbols that can be traded at the same time, if reached, system will reject new orders (i.e. no more trades today). Note: This means total unique symbols; symbols in position window + symbols in order window
  • Max Unreal: Account’s maximum unrealized loss. If reached, system will reject new orders (i.e. no more trades today).
  • StartTime: Starting time to allow trading (HH:MM:SS). No trading will be allowed before this time.
  • StopTime: Ending time to allow trading (HH:MM:SS). No trading will be allowed after this time.
  • Max Mkt Ord: Maximum order size for one market order. System will reject the order if it exceeds this number.
  • Max Lmt Ord: Maximum order size for one limit order. System will reject the order if it exceeds this number.
  • Day BP Lvg: The BP Leverage for Day Trading buying power. Note: Entering 3 into the field = 3 times
  • Night BP Lvg: The BP Leverage for Overnight Trading buying power. Note: Entering 3 into the field = 3 times
  • Fill Rate: Percentage order fill rate for capital control; a new method used for BP calculation. For example, if an order’s BP requirement is $1000 with a 50% fill rate, the order can be placed with 500 BP. Note: 1000 * 50% = 500
  • Order Cap Lmt: Order’s capital limitation; the total value of this symbol’s open order cannot exceed this value. Note: This symbol’s open orders are all the open orders in the Order Window.
  • Max Ord Cap: Maximum order capital for one order; system will reject the order if the order value exceeds this amount.
  • Max Pos Val: Maximum market value per position; system will reject the order if the total market value for this position is going to exceed this amount.

Section 4

  • Symbols To Trade: Allows you to modify the available trading symbols and sizes for the selected account.
  • Symbol: Enter the security symbols that allow this account to trade.
  • Max Sh Position: The maximum shares per position for the associated symbol.
  • Max Loss: Max loss limitation for NET PL (Realized + Commission) for the associated symbol.
  • Max Outst Sh: The maximum order size, per order, for the associated symbol.
  • Enable/Disable: Enable/Disable this account to trade the symbols that are NOT listed.
  • Add a new symbol: Click to add a new row.
  • Route Control: Allows you to modify the available trading routes and exchanges for the selected account.
  • Route: Enter the route allowed to be used by this account.
  • N,A,Q,U,u,O,F: Each character represents an “Y” will enable the route, “N” will disable the route.
  • Enable/Disable: Enable/Disable the selected account to use the routes that are NOT listed.
  • Add a new route: Click to add a new row.
  • Route Strategy: Use the dropdown menu to select the route strategies. Note: This depends on the broker; some firms have this feature enabled.