Pre trade controls are an invisible but indispensable safety net for modern financial markets. They are legally required safety mechanisms under MiFID II Article 48 and Delegated Regulation (EU) 2017/584 (RTS 7) that make sure trading venues check every order before it gets into the order book – accurately, automatically, and in real time. This not only protects against "erroneous" orders but also prevents market disruptions and technical overloads before they arise. This keeps trading stable, transparent, and reliable – even during periods of intense activity and high volumes.
Pre-trade controls include price and volume limits such as price collar checks, maximum order volume, and maximum order value.
Xetra® T7 offers safeguard mechanisms for each instrument:
- Price collar check
The price-collar check prevents orders with a too large price difference compared to the reference price of the respective instrument from entering the order book. The requirement is already implemented in Xetra® T7 (Price Reasonability Check).
- Maximum order volume
A validation of the maximum order volume prevents the entry of orders with a to high volume in the order book. The maximum order volume is determined by Wiener Börse for each instrument, reviewed on an ongoing basis and adjusted if necessary. The entered order volume (new/modified order) is compared with the maximum order volume. If exceeded, the order will be rejected by Xetra® T7.
- Maximum order value
A validation of the maximum order value prevents the entry of orders with a too high value into the order book. The maximum order value is determined by Wiener Börse for each instrument, reviewed on an ongoing basis and adjusted if necessary. The entered order value (new/modified order) is compared with the maximum order value. If exceeded, the order will be rejected by Xetra® T7.
For further information please refer to Xetra® T7 – detailed specifications to the market models
The current values for the maximum order quantity and maximum order value per instrument can be found here:
Current values of the MiFID II Pre-Trade Controls (csv-file)
