The International Securities Exchange Holdings, Inc. today announced that its exchanges ISE and ISE GeminiTM have enhanced their risk management capabilities for market makers by implementing a Market Wide Speed Bump.
The Market Wide Speed Bump improves risk management by limiting a market maker's total exposure across a market. As part of the exchanges' existing portfolio of risk management offerings, market makers are required to set risk thresholds for each options class they are quoting. The Market Wide Speed Bump is activated automatically if these thresholds are breached for multiple products within a specified time period, and all quotes for that market maker are then inactivated.
"The implementation of the Market Wide Speed Bump provides our members with an across-the-market safeguard over their quoting activity," said Boris Ilyevsky, Managing Director. "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."
The Market Wide Speed Bump was implemented on February 18, 2014 and is mandatory for all market makers.