Once an order reaches the exchange, it is very hard to call back. If it was too large, priced wrongly or placed by a client without the money to pay for it, the broker carries the consequences. That is why the most important checks happen before the order leaves the firm.
Four checks that protect the firm
- Buying power: does the client have the cash or securities needed for this order?
- Credit lines: if the client trades on credit, is the order within the limit the firm has granted?
- Position limits: would this order take the client beyond the position the firm allows?
- Price bands: is the price within the range the market permits, or is it likely to be a typing mistake?
Each check is simple on its own. The difficulty is applying all of them, every time, to every order, without slowing trading down.
Every channel, one set of rules
Orders reach a broker through many routes: branches, the call centre, the web, mobile apps and API connections from other systems. If each channel applies its own checks, gaps appear. The OTS Order Management System captures orders from all of these channels and applies the same pre-trade controls to each one before routing it to the exchange gateway.
A trail from entry to fill
Clients, auditors and regulators all ask the same question sooner or later: what happened to this order? The OMS keeps a complete trail for every order, from entry through routing and execution to the final fill, so the answer is always available.
The most important checks happen before the order leaves the firm.
Connected to the rest of the brokerage
Pre-trade checks depend on accurate balances and positions, which live in the back office. Clients, meanwhile, place most orders through a trading platform. An OMS that works with the Brokerage Back Office and with Optimum Trader keeps those three views of the client consistent.