The systematic observation and tracking of activities, balances, and risk exposures within individual sub-accounts managed under a master account, typically for institutional clients on a crypto exchange or prime brokerage platform. This provides granular control and transparency for managing multiple trading strategies or client portfolios.
Mechanism
Sub-account monitoring systems provide real-time data streams and reporting capabilities for each segregated sub-account. This includes tracking asset balances, open positions, margin utilization, trade history, and profit and loss (P&L) attribution. The master account holder can define specific trading permissions, risk limits, and collateral allocations for each sub-account. Automated alerts are triggered if any sub-account breaches predefined thresholds, enabling prompt intervention and risk mitigation.
Methodology
The strategic implementation of sub-account monitoring is crucial for institutional crypto firms to manage complex trading operations, facilitate prime brokerage services, and ensure regulatory compliance. It enables efficient capital allocation across different strategies or client mandates while maintaining clear audit trails and segregating responsibilities. This framework supports sophisticated risk management by providing a consolidated view of overall exposure while allowing for precise, individualized control over segregated capital within a unified trading infrastructure.
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