Trading & Exposure Limits — OpenYield

Trading & Exposure Limits

How risk limits work on the OpenYield ATS. Every order is checked against pre-trade risk controls under SEC Rule 15c3-5 (the Market Access Rule) before it reaches the marketplace. This page explains how limits are set, what each limit means, and what happens when one is reached.

How limits are set

System-wide limits are the foundation. Every subscriber's limits sit beneath them, set one of two ways depending on whether the subscriber is a broker-dealer.

System-wide limits

Platform-wide ceilings set at the asset-class level. No subscriber limit exceeds these.

Each subscriber is then either:

BD subscriber

Broker-dealers may propose and maintain their own limits (FINRA permits BDs to set their own). OpenYield reviews them and may apply more restrictive levels.

Non-BD subscriber

OpenYield Operations assigns limits based on a risk review — firm type, AUM, and asset-class mix. Non-BDs may request tighter levels, but not wider ones.

All limits apply per asset class — hitting a limit in one asset class does not affect your trading in another.

What each limit means

Six controls apply to every order and to your running exposure for the day.

Price

Maximum Price Deviation

The furthest a limit price may sit from the security's evaluated price (its mark), measured in points — where 1 point = 1% of par. Orders priced outside the band are rejected, including "fat-finger" errors like a yield typed where a price belongs. Shown in the product as "Mid Price Spread %."

Example: evaluated price is $97 and the tolerance is 5 points (5% of par) → orders are accepted between $92 and $102; anything outside is rejected.

Single Order

Maximum Order Quantity

The largest single order by size, in bonds (1 bond = $1,000 par).

Example: a 10,000-bond limit caps a single order at $10mm par.

Maximum Order Value

The largest single order by dollar (market) value — a backstop that catches high-premium orders the bond-count cap alone wouldn't.

Example: an order whose market value tops the value cap is rejected even when its bond count is within the quantity cap — here, the dollar ceiling is the binding limit.

Exposure

Max Daily Buy Exposure

The day's ceiling on buy-side exposure: executed buys + open bids, per asset class.

Example: $500M limit with $490M in buys and open bids → only $10M of further buy orders accepted.

Max Daily Sell Exposure

The day's ceiling on sell-side exposure: executed sells + open offers, per asset class.

Example: $500M limit with $490M in sells and open offers → only $10M of further sell orders accepted.

Max Daily Gross Exposure

The day's ceiling on combined buy + sell exposure, per asset class.

Example: $1.0B gross limit with $600M bought and $390M sold → only $10M of further orders, either side, accepted.

Limits by asset class

Illustrative subscriber limits as set per asset class.

Asset	Price Dev.	Max Qty	Max Value	Buy Exp.	Sell Exp.	Gross Exp.
Municipal	7.0%	15,000	$20M	$500M	$2.0B	$2.5B
Agency	5.0%	10,000	$15M	$500M	$500M	$1.0B
Sovereign (UST)	3.0%	100,000	$150M	$25B	$25B	$50B
Cert. of Deposit	5.0%	5,000	$7.5M	$500M	$500M	$1.0B
Corporate	5.0%	5,000	$7.5M	$500M	$500M	$1.0B

Max Qty in bonds (1 bond = $1,000 par). Price Dev. = maximum points from the evaluated price, where 1 point = 1% of par. Exposure figures rounded.

Duplicate & self-trade protections

Duplicate protection

The third identical order within a 5-second window is rejected.

Example: three identical 500-bond bids on the same CUSIP at the same price within 5 seconds → the first two are accepted, the third is rejected.

Wash / self-trade protection

If an aggressing order would result in a self-trade, it is cancelled. Firms running genuinely independent desks on one connection can be set up with sub-IDs so legitimate cross-desk trades aren't blocked.

Example: a bid that would lift your own resting offer is cancelled before it can self-trade.

Operational Q&A

Common questions from subscribers and counterparties.

Is the limit measured pre- or post-execution?▼

Pre-trade. Limits are enforced before an order reaches the marketplace: an order that would breach a limit is rejected up front, rather than executed and then unwound after the fact.

How is current exposure calculated?▼

Continuously. Current exposure (buy / sell / gross) by asset class = active open orders + executed orders on the day. Available headroom = max limit − current exposure. Exposure resets to zero at the start of each trading day.

What happens when a limit is reached?▼

Once remaining headroom is less than or equal to the next possible single-order size, all further orders in that asset class are rejected until exposure is reduced — for example, by canceling open orders.

Can we test the limits ourselves?▼

Yes. On request, we provide your compliance or operations team with test-environment trading logins set to a 1:1 mirror of your production limits. You can run 15c3-5 and risk-control testing there as often as you like, on your own schedule, with no impact on production.

Is there an aggregate credit / capital cap?▼

Yes. Gross exposure is capped per asset class for each subscriber, within OpenYield's aggregate platform thresholds.

Can we set our own limits?▼

Yes. BD subscribers may propose and maintain their own limits, subject to OpenYield review — we may apply more restrictive levels. Non-BD subscribers are assigned limits by OpenYield Operations and can request their own levels too, but only tighter than the levels we assign — never wider. Either way, there is no single "max number of trades"; the cap is exposure-based, per asset class, per day.

How do we change a limit, and who can request it?▼

Email tradeops@openyld.com (or reach out via IB) from your firm's designated admin or an authorized delegate; requests from other users are not actioned. Approved changes take effect the next business day.

When does a change take effect?▼

The next business day.

Can we get alerts as we approach an exposure limit?▼

Yes. Optional email alerts at 80%, 90%, and 100% of an exposure limit (daily buy, sell, or gross) can be generated upon request.