QUIK as Risk Server
QUIK is a multifunctional front-office platform that offers vast possibilities for trading and providing services to clients. In addition to its main functions, a variety of approaches to risk management developed within the QUIK platform allows using the latter as a special application — a risk server.QUIK risk server allows monitoring positions and risks online during a trading session. Preliminary checks of all trading operations are carried out in real time. Both broker's own (desk) and clients' operations are controlled. Risk management involves such functions as generation and dispatch of margin calls and automatic closure of positions. The server may monitor any transactions, including ones received from integrated platforms and networks, keep track of working orders, and automatically calculate any type of commission online.
Risk management models used by QUIK server include
- Standard fat-finger pre-trade checks — list of allowed instruments, maximum order size, flood control, divisibility by lots,
- Trading within the limits of one’s cash position (100% prepayment),
- Margin trading with dynamic evaluation of collateral,
- Margin discounting (using a separate leverage or discount for each instrument or group of instruments),
- Portfolio margining for stocks and derivative instruments on these stocks (portfolio evaluation model),
- Limiting proprietary trading operations (for long, short or net positions, for the volume of transactions and other criteria),
- Common position for T0 and T+ accounts,
- Netting of instruments, for example, ones that include local shares and ADR.
QUIK risk server can control risks of the broker's operations with required accuracy. With the risk server, any transaction is processed (checked) on the server before it is sent to the trading system of the exchange. This allows calculations with account for the consequences of this transaction, in terms of possible risks. Before a transaction is sent to the 'gateway' of a relevant exchange, required resources are locked in accordance with the worst scenario. If a transaction is considered unacceptable, it is rejected by QUIK server. This ensures that no transactions that can create unsecured orders enter the trading systems of exchanges. This approach is recommended if the broker is content with performance and latency of a given QUIK trading infrastructure for specific exchanges.
The company has a separate line of trading solutions that along with QUIK server (RISQ server) make up RISQ solutions.
All solutions of this line employ RISQ server as a key element of risk control. However, the server is not directly involved in actual pre-trade checks of forwarded transactions. Actual pre-trade checks are carried out by the ‘RISQ filter’ module on the basis of latest position revaluation supplied by RISQ server, preset restrictions and auxiliary precaution measures. Whenever there is a risk of breaching restrictions, the module halts the order flow.
QUIK Software has a special terminal automating post-trade risk management on equity, FX and derivatives markets — the risk manager’s terminal module CoLibri.