A hands-on options curriculum covering real trading concepts. Read the lessons, work through examples, and test your knowledge.
OVERALL ACADEMY PROGRESS
Free Lesson
Every lesson is free to read. Subscribe to add Signal Desk, progress tracking, PDF downloads and the lesson tutor.
Lesson 7: 18.7: Algorithmic & HFT Compliance Governance (SEC Rule 15c3-5, MAR)
Implement market access risk controls under SEC Rule 15c3-5, EU Market Abuse Regulation (MAR), and algo kill-switches.
1. Market Access Risk Controls (SEC Rule 15c3-5)
SEC Rule 15c3-5 (Market Access Rule) prohibits broker-dealers from providing unfiltered, direct market access (DMA) to exchanges.
Brokers must enforce pre-trade risk controls programmed directly into hardware/software infrastructure: maximum order size limits, credit thresholds, and erroneous price checks.
★ Kill-Switches: Mandatory automated mechanisms capable of instantly severing exchange connectivity and canceling all open working orders across algorithms.
2. EU MAR & Algorithmic Conformance Testing
Under MiFID II and MAR, firms deploying algorithmic trading must conduct rigorous sandbox stress testing, maintain complete code versioning audit trails, and prevent runaway algorithmic loops.
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 does SEC Rule 15c3-5 (the Market Access Rule) require broker-dealers to enforce?
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
- 18.3: Trade Reporting, Audit Trails, & CAT (Consolidated Audit Trail)
- 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
- 18.8: Regulatory Technology (RegTech) & Automated Surveillance Pipelines
Signal Desk is where you practice this on real stocks: real option chains (about 15 minutes delayed), the Trade Check and a paper-trading account that risks no real money. Join to add it, your progress tracking and PDF downloads.