Trading Strategies and Conditional Orders

The Ithaca Trading Platform enables participants to implement trading strategies and trade structured products by utilizing the risk sharing building blocks and the conditional order functionality inherent in the MILP optimization setup.

Conditional orders eliminate the execution risk between different legs while implementing trading strategies. There is a further collateral optimization benefit for conditional orders (initially at order entry only) compared to what will be required for the corresponding orders if submitted as independent orders.

When submitting conditional orders, the profocol will run a collateral optimization on the conditional order as a package and only the optimized collateral will be needed at order entry.

Any inter-dependencies between independent orders that lead to a smaller overall maximum liability compared with the linear sum of the maximum liabilities of all the legs will only take effect after the trades are executed and settled.

For avoidance of doubt this means that at order submission independent orders may require more collateral to be locked up than the overall portfolio will have required if submitted as conditional orders, the matching engine needs to preempt a worst case scenario so as to ensure trustless execution.