Advanced Risk Protection

In 2010, we launched our innovative Advanced Risk Protection feature in response to the industry's calls for system-integrated pre-trade risk tools designed to help safeguard the financial marketplace.

This feature gives members an early warning that a potential problem exists. It empowers members to define individual risk limits for themselves or their associated trading members (NCMs).

With Eurex Release 14.0, we are taking our approach to the next level. Going forward, the feature will also include bilaterally agreed trades entered into the Eurex® system via our EurexOTC Trade Entry services, thereby allowing members to benefit from similar risk controls currently available for on-exchange transactions.

Based on the actual margin parameter/current underlying price and the contract size, a risk calculation is made for the respective off-exchange transaction. This amount will be checked against another risk amount maintained as initially inserted into the system. The transaction is accepted if the risk amount maintained for the respective trader/counterparty/product is greater than or equal to the calculated amount of the entered transaction.

The resulting calculation may not be identical with the actual Eurex Clearing margin requirement but gives a helpful indication of the risk potential attached to the trade.