Risk management

Online risk management checks and ensures availability of sufficient funds at customer’s account for backing of order and positions. Principles of risk management functioning are described below.

Algorithm of order removal

As soon as Available Balance reduces below 0, risk management removes one or several orders to make Available Balance positive again. Orders requiring higher margin are removed first of all. In the event there are no order or all order have been already removed by risk management – no actions happen until the Margin Balance is higher than Liquidation Position Margin.

Liquidation algorithm

As soon as Margin Balance gets less than Liquidation Position Margin, liquidation of customer’s positions starts. Liquidation process consists in automatic closing of all customer positions on market conditions. During the liquidation process, trader cannot perform any transactions.
If the algorithm manages to close all positions on market conditions at liquidation process then the remaining funds on customer’s account are transferred to insurance fund. If the Margin Balance reduces below 0 deficient amount is transferred to the customer from the insurance fund.

Deleverage algorithm

Deleverage procedure starts when insurance fund makes 0 and the Margin Balance of the customer becomes negative. Deleverage process consists in non-market closing of positions with the negative Margin Balance of the customer or several contracting parties. Contracting party is chosen from the customers who have a position on instrument and minimal ratio of the Margin Balance to Liquidation Position Margin at the moment of deleverage; i.e. it is a customer with the highest risk level of the open positions.