International Securities Exchange Holdings announced the substantiated enhancement of its ISE and ISE Gemini exchanges with the advent of a Market Wide Speed Bump, fortifying risk management capabilities for all traditional and Fx options, via an ISE statement.
Two Exchanges, All Options Needs
International Securities Holdings owns and operates two options exchanges, the International Securities Exchange (ISE) and Topaz Exchange, collectively specializing in ETF, Fx, equity, mini, and index options – its Fx options offering entails twenty different currency pairs. The company’s Market Wide Speed Bump initiative is designed to curb latent risk from cropping up in the form of overly broad market exposure.
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The Market Wide Speed Bump acts as a parameter that melds with all existing options within the exchange offering, requiring risk thresholds for each options class. Furthermore, the Market Wide Speed Bump is designed to detect and search for multiple breaches in this framework within a defined timetable, culminating in the inactivity of a quote for the benefit of the user.
Market Wide Speed Bump a Governor of Options Risks
According to Boris Ilyevsky, Managing Director at ISE, in a recent statement, “The implementation of the Market Wide Speed Bump provides our members with an across-the-market safeguard over their quoting activity. This enhancement demonstrates our ongoing commitment to providing our market makers with sophisticated risk management tools and to protecting market integrity and resilience for all exchange members.”
Ultimately, the Market Wide Speed Bump should help govern and mitigate the risks involved in options trading across all types. By placing more stringent controls on quotes, ISE hopes that this new measure will foster safer and more compliant trading.