The risk engine operates in parallel with the matching engine to monitor exposure and maintain market stability. It calculates user positions, margin levels, and unrealized PnL in real time.
For leveraged trading, the engine enforces liquidation thresholds. If a user’s margin ratio falls below maintenance requirements, the system triggers partial or full liquidation automatically.
Circuit breakers may be implemented to halt trading during extreme volatility. Anti-manipulation algorithms detect wash trading, spoofing, or abnormal volume spikes.
The risk engine also manages exposure limits per trading pair to prevent systemic risk. Stress-testing modules simulate extreme scenarios to evaluate resilience. By integrating automated safeguards, the exchange ensures operational stability even during high volatility events.
To explore advanced exchange systems with integrated risk engines.
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