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Risk Management
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Re: Pause or Reject?
John Harris / BondMart Technologies, Inc.
19 Jan 2011 6:05PM ET Mr. Prewett's suggestion is a good one and even holds the promise of an enhanced revenue stream for those brokerage firms that support the new field - they can charge more for handling those orders that request manual intervention if risk parameters are violated.
:-;
> John Harris has raised objection to the "pause" concept as proposed.
>
> There are two positions currently being held:
> 1. No order should ever be paused if it exceeds a risk check, it should just be rejected.
> 2. All orders should be paused if they exceed a risk check, so that a good decision can then be made.
>
> John Harris, on behalf of the electronic trading community amongst others appears to support #1. The authors of the original document support #2 on behalf of medium/high touch customers.
>
> Can't we all just get along?
> :-)
>
> A new FIX tag submitted with the order could be used to indicate the preference as to what behavior (hold or reject) is desired if the risk checks were violated. Then both sides would surely be satisfied.
>
> Clearly there would need to be agreement over what the default behavior would be if this preference tag were omitted, but that would be a substantially less heated debate.
>
> So I suggest the document is updated to show that any order can either be paused or immediately rejected, depending on the order's preference (as indicated by a FIX tag).
>
> Thanks
>
> JohnP
Re: Pause or Reject?
John Harris / BondMart Technologies, Inc. 19 Jan 2011 6:05PM ET
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@FIXProtocol
