Feature

Market Support

Importance

Are you able to run multiple risk-regimes within the same system? A/B Book based, STP, Portfolio VaR based with dynamic, intelligent internalisation? A mixture?

Limited

High

Are you able to run multiple client order routing strategies within your system? 

Partial

High

Internalising the right risk, to be able to interpret the nature of the flow, being sensitive to holding periods whilst ensuring that you exit the position in a market aware fashion seeing hedging as a source of revenue.

Rare

Very High

Are you internalising risk at the right price via bank-grade pricing models, or aggregating some other LP’s rate and using that? A rate at which the originating LP may have rejected, if the order was routed to them.

Rare

High

Does your risk management system risk-transfer when arbitrary risk limits are met or does it supply algorithmic execution to exit risk at better than risk-transfer rates? How good is that?

Rare

Very High

Are you able to rerun historical risk handling scenarios with realistic simulation capacity to ensure that changes to your system’s configuration would have improved PnL and if so by how much?

Rare

Very High

Can you offer your clients different pricing and trading SLAs than those that your LPs offer? Can you take control of your own liquidity provision?

Rare

High

Can you offer varying degrees of execution quality in your hedging strategies allowing you to control how much you want to exploit vulnerabilities in an LPs pricing? Can this incorporate the current state of the relationship with the LP based on an historical evaluation of recent flow?

Rare

Very high