A hands-on options curriculum covering real trading concepts. Read the lessons, work through examples, and test your knowledge.
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Lesson 3: 18.3: Trade Reporting, Audit Trails, & CAT (Consolidated Audit Trail)
Master trade reporting requirements, SEC Rule 613 Consolidated Audit Trail (CAT), OATS, and clock synchronization.
1. The Consolidated Audit Trail (CAT) Mandate
Under SEC Rule 613, the Consolidated Audit Trail (CAT) creates a single, comprehensive database tracking every order, quote, cancellation, and execution across all US national market equity and options exchanges.
Replaced legacy OATS (Order Audit Trail System) to provide regulators with complete cross-market order lifecycle visibility.
★ Clock Synchronization: Brokers and exchanges must synchronize clocks to within milliseconds (or microseconds for HFT) of NIST standard time.
2. Data Privacy & Reporting Telemetry
CAT ingests billions of daily event records, linking customer identities with exact trade execution sequences for regulatory forensics.
Click to enlargeIV Crush Scenario Visualizer
Implied Volatility (IV) Crush is the primary account-killer for option buyers after earnings announcements. Play with the controls below to see how option premium collapses depending on Vega.
Scenario Modeling
KNOWLEDGE RECONNAISSANCE
What is the primary function of the SEC's Consolidated Audit Trail (CAT)?
More lessons in this module
- 18.0: Global Market Regulatory Frameworks (SEC, CFTC, FINRA, ESMA, FCA)
- 18.1: Market Abuse, Insider Trading, & Front-Running Enforcement
- 18.2: Anti-Money Laundering (AML) & Know Your Customer (KYC) Protocols
- 18.4: Capital Adequacy Rules, Basel III/IV, & Risk-Weighted Assets
- 18.5: Best Execution Compliance & MIFID II Unbundling Requirements
- 18.6: Cross-Border Regulatory Jurisdictions & Offshore Tax Frameworks
- 18.7: Algorithmic & HFT Compliance Governance (SEC Rule 15c3-5, MAR)
- 18.8: Regulatory Technology (RegTech) & Automated Surveillance Pipelines
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