Washington, D.C.— FIA, a leader for over 14 years in the development of best practices for mitigating the risks of electronic trading, has released its latest paper - Best Practices for Automated Trading Risk Controls and System Safeguards.
This paper consolidates our previous work and covers best practices in pre-trade risk management, exchange volatility control mechanisms, post-trade analysis and exchange-based conformance testing, among other areas. These practices are designed to help ensure that markets operate safely, regardless of the technology used. The tools developed through the collaboration of market participants and exchanges to manage the risks related to automated trading have proven highly effective in limiting market disruptions and protecting markets.
"As we reviewed our previous work in connection with the production of this paper, we were pleased to find that, as trading technologies have evolved over time, the risk mitigation tools used by market participants and exchanges continue to keep our markets operating effectively. Although the paper builds on more than a decade of work in this area, the practices it outlines are well suited to both existing technologies and evolving ones, such as Artificial Intelligence," said Walt Lukken, President and CEO of FIA.
