INTERMEDIATE // TRADING DESK
MODULE 07 // CONTROLS

Risk Limit Monitoring.

Monitor trader behavior against risk limits and detect attempts to circumvent controls.

BEHAVIORAL RISK CONTROLS

Traditional risk controls check positions and P&L against limits. ABIS adds behavioral dimension: detecting when traders attempt to circumvent controls through account splitting, coordinated trading, or limit gaming.

Key behaviors to monitor: concentration approaching limits (pre-breach warning), unusual account switching patterns, coordinated activity across accounts, and trading patterns that suggest limit awareness/gaming.

Integration with existing risk systems: ABIS provides behavioral risk score as additional factor in limit decisions. A trader near limit with suspicious behavioral signals might face tighter restrictions than one with normal behavior.

LIMIT APPROACH WARNING

Detect when behavior suggests trader is intentionally approaching limits. Early warning for risk managers.

ACCOUNT SPLITTING DETECTION

Identify coordinated activity across accounts to circumvent single-account limits.

LIMIT GAMING PATTERNS

Detect trading patterns designed to exploit limit calculation timing or methodology.

ESCALATION TRIGGERS

Automatic escalation to senior risk management when behavioral signals indicate elevated risk.

KNOWLEDGE CHECK // Q07
How can ABIS detect account splitting used to circumvent risk limits?